2021/12/09 by Gregory E. Givens, Gregory Givens · 5 citations
Business, Management and Accounting · Economics, Econometrics and Finance · #Consumer spending #Consumption (sociology) #Econometrics #Economic growth #Economics #Financial Literacy, Pension, Retirement Analysis #Fiscal Policy and Economic Growth #Fiscal policy #Government (linguistics) #Government spending #Labour economics #Macroeconomics #Margin (machine learning) #Monetary Policy and Economic Impact #Monetary economics #Multiplier (economics) #Private consumption #Recession #Unemployment #Welfare #Workforce
paper · open access · doi:10.1111/iere.12560
published in International Economic Review 63(2), 571-599 (Wiley)
openalex publication_date 2021/12/09 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/25
Abstract I interpret evidence on government spending multipliers using a model in which workers are not fully insured against job loss. Government consumption affects aggregate spending along two margins : (i) an intensive margin owing to a fall in household wealth and (ii) an extensive margin that accounts for growth in the workforce. At insurance levels below a certain threshold, the positive effects of (ii) dominate the negative effects of (i), leading to multipliers for private consumption and output that exceed zero and one. Similar results appear in a quantitative model scaled to match microestimates on the consumption cost of unemployment.