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UID:207afa230b8c78e56428e5ca6baab19a
CATEGORIES:Seminars
CREATED:20180703T151013
SUMMARY:Ethan Kaplan - University of Maryland
DESCRIPTION;ENCODING=QUOTED-PRINTABLE:Excess Capacity and Heterogeneity in the Fiscal Multiplier: Evidence from t
 he Recovery Act joint with Arindrajit Dube, Thomas Heglandy and Ben Zippere
 r\nAbstract:\nWe estimate local multipliers using cross-county variation in
  expenditure in the ARRA. We use within state variation, and include other 
 demographic controls as well as a predicted employment control using an ind
 ustry shift-share measure. We find that counties receiving more stimulus ex
 penditures had followed parallel employment trends prior to the ARRA as com
 pared to other counties. We estimate an average annualized employment multi
 plier of 1.211 job-years per $100K spent per county resident. We find stron
 g evidence of heterogeneous treatment effects: the employment response is m
 uch greater in counties hit harder by the Great Recession, and hence with l
 ikely greater excess capacity. In below median excess capacity counties, th
 e employment multiplier is 0.39. In above median excess capacity counties, 
 the multiplier rises to 2.83. These findings imply that an employment-maxim
 izing stimulus package targeted to high excess capacity counties would have
  created 83% more (3.60 million) jobs. While our findings are consistent wi
 th state-dependent fiscal multipliers, the heterogeneity is not due to the 
 zero-lower bound since our cross-sectional variation in excess capacity hol
 ds the interest rate constant. Instead, our findings suggest that the spati
 al variation in multipliers reflects variation in the depth of the recessio
 n across different labor markets. Consistent with the evidence on hysteresi
 s, we find that the employment impact of the stimulus was long lasting and 
 have likely persisted through the current expansion.\n
DTSTAMP:20260403T183344Z
DTSTART:20190530T163000Z
DTEND:20190530T180000Z
SEQUENCE:0
TRANSP:OPAQUE
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