Simple Analytics and Empirics of the Government Spending Multiplier and Other "Keynesian" Paradoxes
Year: 2010
Type: report
Abstract: ABSTRACT~Factor supply increases (depresses) output for many of the same reasons that the government spending multiplier might be less (greater) than one.Data from three 2008-9 recession episodesthe labor supply shifts associated with the seasonal cycle, the 2009 federal minimum wage hike, and the collapse of residential construction spending -clearly show that markets absorb an increased supply of factors of production by increasing output.The findings contradict the "paradox of toil" and suggest that the government spending multiplier is less than one, even during this recession.
DOI: 10.3386/w15800
Author: Casey Mulligan
Institutions: National Bureau of Economic Research, University of Chicago
Language: English
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2045175027