Government Spending and Consumption at the Zero Lower Bound: Evidence from Household Retail Purchase Data

Marios Karabarbounis, Marianna Kudlyak, M. Saif Mehkari () and Bill Dupor

No 1463, 2016 Meeting Papers from Society for Economic Dynamics

Abstract: This paper uses cross-regional variation in the fiscal stimulus of 2009-2013 to analyze the effects of government spending on household-level consumption when the nominal interest rate is zero. The key novelty is the construction of a comprehensive measure of local consumption expenditures using (i) household-level retail purchase data using Nielsen Homescan Consumer Panel and (ii) state-level consumption data from the BEA. Most of our specifications point toward a significantly positive consumption multiplier around 0.25 for non-durable consumption. We translate our regional multiplier into an aggregate multiplier using a heterogeneous agents, New Keynesian model with multiple regions and input linkages.

Date: 2016
New Economics Papers: this item is included in nep-dge
References: Add references at CitEc
Citations:

Downloads: (external link)
https://red-files-public.s3.amazonaws.com/meetpapers/2016/paper_1463.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:sed016:1463

Access Statistics for this paper

More papers in 2016 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().