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Estimating Local Fiscal Multipliers

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  • Juan Serrato
  • Philippe Wingender

Abstract

This paper proposes a new source of cross-sectional variation that may identify causal impacts of Government spending on the economy. It uses the fact that a large number of federal spending programs depend on local population levels. Every ten years, the Census provides a count of local populations. Since a different method is used to estimate non-Census year populations, this change in methodology leads to variation in the allocation of billions of dollars in federal spending. The baseline results follow a treatment-effects framework where the effect of a Census Shock on federal spending, income, and employment growth by re-weighting the data based on an estimated propensity score that depends on lagged economic outcomes and observed economic shocks are estimated [Working Paper 22425]

Suggested Citation

  • Juan Serrato & Philippe Wingender, 2016. "Estimating Local Fiscal Multipliers," Working Papers id:11109, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:11109
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    More about this item

    Keywords

    cross-sectional variation; Census; government spending; economy; American Recovery and Reinvestment Act (ARRA);
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H5 - Public Economics - - National Government Expenditures and Related Policies

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