COWLES FOUNDATION FOR RESEARCH IN
ECONOMICS Box 208281
COWLES FOUNDATION DISCUSSION PAPER NO. 1756 Estimated Macroeconomic Effects of the U.S. Stimulus Bill Ray C. Fair March 2010 This paper uses a multicountry macroeconometric model to estimate the
macroeconomic effects of the U.S. stimulus bill passed in February 2009. The analysis has
the advantage of taking into account many endogenous effects. Real U.S. output is
estimated to be $554 billion larger when summed over the 12-year period 2009:1–2020:4
(0.29 percent of the total sum of output). The average number of jobs is 509 thousand
larger (0.37 percent). There is some redistribution of output and employment away from
2012–2015. At the end of 2020 the federal government debt is larger by $637 billion
in real terms (the debt/GDP ratio is larger by 3.19 percentage points), which may increase
the risk of negative asset-market reactions. |
