Publication Date: March 2010
Revision Date: May 2010
This paper uses a multicountry macroeconometric model to estimate the macroeconomic eﬀects of the U.S. stimulus bill passed in February 2009. The analysis has the advantage of taking into account many endogenous eﬀects. Real U.S. output is estimated to be $554 billion larger when summed over the 12-year period 2009:1–2020:4 (0.29 percent of the total sum of output). The average number of jobs is 509 thousand larger (0.37 percent). There is some redistribution of output and employment away from 2012–2015. At the end of 2020 the federal government debt is larger by $637 billion in real terms (the debt/GDP ratio is larger by 3.19 percentage points), which may increase the risk of negative asset-market reactions.
Stimulus eﬀects, Government spending multipliers
JEL Classification Codes: E17
Published in Contemporary Economic Policy (October 2010), 439-452