TY  - JOUR
AU  - Cogan,John F.
AU  - Cwik,Tobias
AU  - Taylor,John B.
AU  - Wieland,Volker
TI  - New Keynesian versus Old Keynesian Government Spending Multipliers
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14782
PY  - 2009
Y2  - March 2009
UR  - http://www.nber.org/papers/w14782
L1  - http://www.nber.org/papers/w14782.pdf
N1  - Author contact info:
John Cogan
Hoover Institution
Stanford University
Stanford, CA   94305
Tel: NA
E-Mail: cogan@stanford.edu

Tobias Cwik
Goethe-Universitat Frankfurt am Main
House of Finance, PF H 31
D-60323 Frankfurt/Main
E-Mail: cwik@wiwi.uni-frankfurt.de

John B. Taylor
Herbert Hoover Memorial Building
Stanford University
Stanford, CA 94305-6010
Tel: 650/723-9677
Fax: 650-723-1687
E-Mail: John.Taylor@stanford.edu

Volker Wieland
Goethe University Frankfurt
House of Finance, PF H 31
D-60323 Frankfurt/Main
E-Mail: wieland@wiwi.uni-frankfurt.de
AB  - Renewed interest in fiscal policy has increased the use of quantitative models to evaluate policy.  Because of modelling uncertainty, it is essential that policy evaluations be robust to alternative assumptions. We find that models currently being used in practice to evaluate fiscal policy stimulus proposals are not robust. Government spending multipliers in an alternative empirically-estimated and widely-cited new Keynesian model are much smaller than in these old Keynesian models; the estimated stimulus is extremely small just when needed most, and GDP and employment effects are only one-sixth as large, with private sector employment impacts likely to be even smaller.
ER  -