The Local Multiplier: Theory and Evidence. I show that 1) the policy-relevant "global multiplier" can be written as the sum of a spending component and a taxation component, all scaled up by spillover effects, 2) the "local multiplier" is exactly the spending com- ponent, and 3) if trade is anonymous, the local effects of a shock to federal government purchases in a county will be identical to the effects of a shock to consumer demand for the exports of that locality. I estimate a bound for the local multiplier and consider spillover effects to contiguous counties. I find that a shock of $48,000 creates at least one job-year locally. Analysis at a monthly frequency suggests that these jobs are more persistent than previously estimated. Evidence of higher multipliers in recessions is mixed. / Economics
| Identifer | oai:union.ndltd.org:harvard.edu/oai:dash.harvard.edu:1/11156789 |
| Date | January 2013 |
| Creators | Mendel, Joshua Brock |
| Contributors | Shleifer, Andrei |
| Publisher | Harvard University |
| Source Sets | Harvard University |
| Language | en_US |
| Detected Language | English |
| Type | Thesis or Dissertation |
| Rights | closed access |
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