2021, Alan Auerbach, "Fiscal Multipliers during the COVID-19 Pandemic"
Presenter
Many nations, including the United States, pursued aggressive fiscal stimulus to combat pandemic-related declines in economic activity in 2020. Assessing the impact of greater spending and reduced taxes is difficult, however, because the labor market disruptions associated with COVID-19, and other public policies such as stay-at-home orders, could offset the usual expansionary effect. In a new study (29531) of the association between government spending, employment, and consumption in US cities, NBER research associates Alan Auerbach and Yuriuy Gorodnichenko of the University of California, Berkeley, and their collaborators Peter McCrory of JP Morgan Chase and Daniel Murphy of the University of Virginia, find expansionary effects of fiscal policy in locations that did not adopt strict stay-at-home policies, but very little impact in places with strict policies. Auerbach summarizes the study's findings in the video above. An archive of NBER videos on pandemic-related research may be found here.