itfitzme
VIP Member
It would be really awesome to prove thqt there is no fiscal spending multiplier. *The person that does this wil go down in economic history. *To do so would require understanding the entire body of research on fiscal multipliers and demonstrating how and why all the previous literature is wrong as well as how the prevailing macro economic theory on marginal propensity to spend, etc.
It would be great to show whstbthe tax and spending multipliers are, given the available public info.
I've tried it, for the tax multiplier, using a single variable linear regression, to no avail. *Of course, failing to show it is not showing it is not. *
A better approach would be a two variable regression with both gov't spending and taxes. *
Even then, there are issues because the fiscal muptipliers vary depending on the state of the economy. *Both can be negative. *No one doubts that goverent spending can crowd out private markets during certain stages of business cycle. *And, oddly, the liturature indicates that there are times when the tax multiplier can be negative. *The problem is that a quantity that varies both positive and negative over a span of data will simply not show up. *Even worse, the fiscal multiplier effects are transitory.
**I doubt that anyone posting here has either the statistical skill or computing power to pull it off, myself included. *It can be a fun exercise, though doomed for failue, just for practice. *It's the kind of thing that is done as a project for a graduate intoduction to econometrics or linear regression course.
Personally, I will leave it to the really smart guys that have Ph.Ds and do it for a living. There are a few peer reviewed articles available published by the NBER and IMF.
It would be great to show whstbthe tax and spending multipliers are, given the available public info.
I've tried it, for the tax multiplier, using a single variable linear regression, to no avail. *Of course, failing to show it is not showing it is not. *
A better approach would be a two variable regression with both gov't spending and taxes. *
Even then, there are issues because the fiscal muptipliers vary depending on the state of the economy. *Both can be negative. *No one doubts that goverent spending can crowd out private markets during certain stages of business cycle. *And, oddly, the liturature indicates that there are times when the tax multiplier can be negative. *The problem is that a quantity that varies both positive and negative over a span of data will simply not show up. *Even worse, the fiscal multiplier effects are transitory.
**I doubt that anyone posting here has either the statistical skill or computing power to pull it off, myself included. *It can be a fun exercise, though doomed for failue, just for practice. *It's the kind of thing that is done as a project for a graduate intoduction to econometrics or linear regression course.
Personally, I will leave it to the really smart guys that have Ph.Ds and do it for a living. There are a few peer reviewed articles available published by the NBER and IMF.