The CBO calculated multipliers to estimate the effect on output of various kinds of stimulative programs, and then applied them to the amount of money spent in the stimulus on each type of program. For example, payments to state and local governments for infrastructure were estimated to have a multiplier of between 1 and 2.5, whereas the multiplier for transfer payments (unemployment benefits, food stamps, etc.) to individuals was between 0.8 and 2.1.As the business cycle slowly moves up, more stimulus would be a good thing.
Wednesday, October 03, 2012
In a number of stimulus studies the CBO's multiplier effects are noted.