The Size of the Multiplier: Comparing Alternate Views After the Great Recession

<p>This thesis reviews the major theoretical frameworks and their outlook on the government spending, its effectiveness, the implied size of the multiplier and how they differed in empirical studies. This is followed by an estimation of the government multiplier for the major U.S. fiscal policy, namely the American Recovery and Reinvestment Act (ARRA), after the Great Recession of 2007-2009. Own estimation of the size of the multiplier is presented using a standard SVAR model based on New Keynesian approach for time period between 2009 and 2018. In addition, following the classical economic theory, the multiplier is recalculated in the absence of Finance, Insurance, and Real Estate (FIRE) sector which is considered to be unproductive sector since it does not add value according to the classical theory. I find the multiplier to be below unity during this period with the exception when the FIRE industries are excluded.</p>

Name thesis:degree_name

M.A.

Level thesis:degree_level

Masters Thesis

Year dc:date.available

2019

Author dc:creator

• Focht, Daniel

Contributors dc:contributor

• Yavuz Yasar, Ph.D.

• Econometrics
• Fiscal policy
• Government spending multiplier
• History of economic thought
• Monetary policy
• Economic History
• Economics
• Economic Theory
• Social and Behavioral Sciences

Statement dc:rights

• <p>Copyright is held by the author. User is responsible for all copyright compliance.</p>

Language dc:language

en

Repository record dc:identifier

https://digitalcommons.du.edu/etd/1658

OAI identifier oai:identifier

oai:digitalcommons.du.edu:etd-2658