TY  - JOUR
AU  - Mulligan,Casey B.
TI  - Simple Analytics and Empirics of the Government Spending Multiplier and Other “Keynesian” Paradoxes
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15800
PY  - 2010
Y2  - March 2010
UR  - http://www.nber.org/papers/w15800
L1  - http://www.nber.org/papers/w15800.pdf
N1  - Author contact info:
Casey B. Mulligan
University of Chicago
Department of Economics
1126 East 59th Street
Chicago, IL  60637
Tel: 773/702-9017
Fax: 773/702-8490
E-Mail: c-mulligan@uchicago.edu
AB  - Factor supply increases (depresses) output for many of the same reasons that the government spending multiplier might be less (greater) than one.  Data from three 2008-9 recession episodes - the labor supply shifts associated with the seasonal cycle, the 2009 federal minimum wage hike, and the collapse of residential construction spending - clearly show that markets absorb an increased supply of factors of production by increasing output.  The findings contradict the "paradox of toil" and suggest that the government spending multiplier is less than one, even during the recession.
ER  -