Fiscal Multipliers

Fiscal  Multipliers

One question in the debate over the stimulus package of 2009, as well as the recovery package of 2020 (CARES act) was the magnitudes of the fiscal multipliers – in particular those for spending on government services and spending on government transfers, and to a lesser extent those for tax cuts. In your analysis, discuss:

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  • Why these multipliers should differ in magnitude even in simple Keynesian

 

  • Whether these multipliers depend on the conduct of monetary policy, and in particular, the conduct of monetary policy during the Great

 

  • Whether the special conditions of 2020 should have had an

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