Federal Reserve Bank of San Francisco
FRBSF Economic Letter
How Much Consumption Responds to Government Stimulus
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.
Cite this item
Marios Karabarbounis & Marianna Kudlyak & M. Saif Mehkari, "How Much Consumption Responds to Government Stimulus"
, Federal Reserve Bank of San Francisco, FRBSF Economic Letter, number 11, 2018.
This item with handle RePEc:fip:fedfel:00162
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