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Working Paper
Macro fiscal policy in economic unions: states as agents
An important component of the American Recovery and Reinvestment Act?s (ARRA?s) $796 billion proposed stimulus budget was $318 billion in fiscal assistance to state and local governments, yet the authors have no precise estimates of the impact of such assistance on the macroeconomy. In evaluating ARRA, both the Council of Economic Advisors (CEA) and the Congressional Budget Office (CBO) used instead the impacts of direct federal spending and tax relief. These estimates miss the role of states as agents. The authors provide estimates of aid?s multiplier effects allowing explicitly for state ...
Discussion Paper
State Budget Surpluses, the COVID-19 Impact, and ARPA Funds
Working Paper
Modeling the Consumption Response to the CARES Act
To predict the effects of the 2020 U.S. CARES act on consumption, we extend a model that matches responses of households to past consumption stimulus packages. The extension allows us to account for two novel features of the coronavirus crisis. First, during the lockdown, many types of spending are undesirable or impossible. Second, some of the jobs that disappear during the lockdown will not reappear when it is lifted. We estimate that, if the lockdown is short-lived, the combination of expanded unemployment insurance benefits and stimulus payments should be sufficient to allow a swift ...
How Quickly Does Fiscal Policy Get Implemented?
The response to the 2007-09 recession can provide a sense of timing when it comes to implementing fiscal policy.