Journal Article

How Much Consumption Responds to Government Stimulus


Abstract: What is the effect of government spending on private consumption? Estimates show that stimulus distributed through the American Recovery and Reinvestment Act had a large positive effect. Estimates from regional data suggest every $100 of stimulus generated an additional $18 within regions. Furthermore, by accounting for economic connections that spread the impact beyond regional borders, a new study finds that every $100 triggered an increase of $40 in overall private consumption in the economy.

Access Documents

File(s): File format is application/pdf https://www.frbsf.org/economic-research/files/el2018-11.pdf
Description: Full text

Authors

Bibliographic Information

Provider: Federal Reserve Bank of San Francisco

Part of Series: FRBSF Economic Letter

Publication Date: 2018

Order Number: 11