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Global Economic Watch Fiscal Policy October 12, 2009

Explore the impact of the Recovery Act on the economy, including GDP gap analysis and fiscal policy effects. Evaluate government spending multipliers and the long-term benefits of infrastructure investments.

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Global Economic Watch Fiscal Policy October 12, 2009

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  1. Global Economic Watch Fiscal Policy October 12, 2009

  2. GDP Gap Figure 2-13.  GDP Gap (Percentage of potential gross domestic product) http://www.cbo.gov/ftpdocs/97xx/doc9706/Chapter2.6.1.shtml#1085839

  3. Recovery Act The Recovery Act was intended to jumpstart the economy but many of the projects funded by Recovery money, especially those involving infrastructure improvements, are expected to contribute to economic growth for many years. http://www.recovery.gov/

  4. CEA Report As of the end of August, $151.4 billion of the original $787 billion has been outlaid or has gone to American taxpayers and businesses in the form of tax reductions.

  5. Unemployment

  6. Mankiw & Multipliers “The results in Valerie Ramey's research suggest a government spending multiplier of about 1.4.” http://econ.ucsd.edu/~vramey/research/IdentifyingGovt.pdf

  7. Discussion Do you think the Recovery Plan is working? Why there is a fiscal policy lag? How is the effect of government spending multiplied? http://www.whitehouse.gov/administration/eop/cea/

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