Multipliers Used In Stimulus Plans

John Taylor’s May 21 blog post discusses the stimulus multiplier used for the ARRA and new research from the IMF with regard to actual stimulus multipliers.

The chart shown has immense significance on a variety of fronts, assuming that the IMF research is representative of the effectiveness of stimulus spending.

We, as a nation, do ourselves no benefit by continually overestimating the (gross) benefits to be derived by stimulus actions.


As I’ve previously commented, I don’t believe the concept of stimulus spending is well understood.  My previous writings on stimulus can be found here.  Stimulus spending is of particular noteworthiness as I believe that we will continue to enact stimulus spending in significant amounts.

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SPX at 1089.41 as this post is written