Category Archives: Stimulus Impact

Not More of the Same Model Simulations!

Simulations of Mark Zandi’s economic model, which are reported in the press to show that a new temporary stimulus package will create 1.9 million jobs, are being touted as evidence that it will work. This is the same type of model simulation that predicted … Continue reading

Posted in Stimulus Impact

Two Congressional Hearings on the Second Stimulus and Alternatives

Congress was busy working on fiscal policy today. This morning, over on the House side, it held its first hearing on President Obama’s fiscal stimulus proposal. As one of the witnesses, I argued that the fiscal policy responses thus far to the unemployment … Continue reading

Posted in Stimulus Impact

Don’t Stay the Course

Here is my New York Times oped Not More of the Same on why it is urgent to change the course of economic policy. My critique of Keynesian countercyclical policy, which is summarized in the NYT article, has been challenged by Fred Bergsten of the Peterson … Continue reading

Posted in Stimulus Impact

No Near-Consensus Among Economists for Another Stimulus Package

Sunday’s Weekend Edition on NPR gave listeners a chance to hear different economic views on how to reduce the high unemployment rate. Joe Stiglitz represented the view that we need another deficit-financed stimulus package with more spending now and tax increases later. … Continue reading

Posted in Stimulus Impact

No, A Bigger Stimulus Would Not Have Worked Either

Paul Krugman writes (citing Noah Smith) that he agrees with the empirical findings in my critique of the revival of Keynesian activism in the 2000s (the stimulus packages of 2001, 2008 and 2009). In particular, he writes that “it’s far … Continue reading

Posted in Stimulus Impact

How to Resolve the Stimulus Debate: Use Data Not the Same Models Over Again

Predictions made in early 2009 about whether the stimulus package would work varied widely because the models used to make the predictions varied widely. Models used by Christy Romer and Jared Bernstein predicted large effects of the 2009 stimulus (ARRA), … Continue reading

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Why the Stimulus Failed to Boost Infrastructure in the US: A Comparison With China

The data are now clear. Despite its large size, the 2009 U.S. stimulus package failed to increase government infrastructure spending or other government purchases as its promoters had claimed it would. The large federal stimulus grants sent to state and … Continue reading

Posted in Stimulus Impact

The Empty Chairs at the ARRA Hearing

Two years ago this week the 2009 stimulus package was enacted into law, and, to examine its effects, the House Committee on Oversight—Subcommittee on Regulatory Affairs held a hearing chaired by Jim Jordan of Ohio and ranking Member Dennis Kucinich … Continue reading

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Models Used for Policy Should Reflect Recent Experience, But Do They?

Data from the Department of Commerce show that short-term stimulus funds did not go to increase federal purchases, or state and local purchases, or even consumption purchases by much over the past few years. Thus the packages did not materially … Continue reading

Posted in Stimulus Impact

Stimulus Math: Many Multiples of Nothing is Still Nothing

In an article in tomorrow’s Wall Street Journal, John Cogan and I review our research showing why the 2009 stimulus package did little to stimulate the economy, despite its large size. The reserch continues our earlier work showing why the … Continue reading

Posted in Stimulus Impact