Government spend no more effective at ZLB – NBER paper
Results imply zero lower bound does not make stimulus more powerful
The power of US government spending to stimulate the economy remains roughly constant, even as slack in the economy varies and when monetary policy hits a zero lower bound (ZLB), research published by the National Bureau of Economic Research (NBER) has found.
Authors Valerie Ramey and Sarah Zubairy construct a new quarterly dataset running from 1889 to 2013 in their paper, Government Spending Multipliers in Good Times and Bad. Using a "local projection method", they find "no evidence" that the
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