ESTIMATED MACROECONOMIC EFFECTS OF THE U.S. STIMULUS BILL |
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| Authors: | RAY C FAIR |
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| Institution: | 1. Fair: Professor of Economics, Cowles Foundation and International Center for Finance, Yale University, New Haven, CT 06520‐8281. Phone (203) 980‐0646, Fax (203) 432‐6167, E‐mail ray.fair@yale.edu, Website fairmodel.econ.yale.edu;2. The results in this paper can be duplicated on the author's website, and alternative experiments can be performed. The MCE version is used, dated January 30, 2010. I am grateful to the referee for helpful comments. |
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| Abstract: | 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% of the total sum of output). The average number of jobs is 509 thousand larger (0.37%). There is some redistribution of output and employment away from 2012 to 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. (JEL E17) |
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