Crowding Out Fiscal Stimulus: Testing the Effectiveness of US Government Stimulus Programs

by John J. Heim

Overview

This book presents overwhelming evidence that US government stimulus programs over the past fifty years have not worked. Using the best and most modern econometric testing models, it applies 228 separate hard science tests to examine the effects of different stimulus models that should, in theory, have shown positive results. By testing every possible alternative interpretation, starting with one time period and then retesting in three additional time periods, this definitive study finds that even when favoring pro-stimulus Keynesian models, public financing through government tax cuts and spending increase programs is more likely to drive down - or "crowd out" - as much private sector spending as it stimulates in the public sector.

Product Details

ISBN-13:	9783319459660
Publisher:	Springer International Publishing
Publication date:	12/09/2016
Edition description:	1st ed. 2017
Pages:	272
Product dimensions:	5.83(w) x 8.27(h) x (d)

About the Author

John J. Heim is Visiting Professor at University of Albany-SUNY, and retired Clinical Professor of Economics at Rensselaer Polytechnic Institute, both in New York, USA.

Table of Contents

1. Introduction
2. Theory of Crowd Out
3. Literature Review
4. Methodology
5. Test Results: Consumer Spending and Borrowing Models (1 Variable Deficit)
6. Test Results: Investment Spending and Borrowing Models (1 Variable Deficit)
7. Test Results: Consumer Spending and Borrowing Models (2 Variable Deficit)
8. Test Results: Investment Spending and Borrowing Models (2 Variable Deficit)
9. Are Findings of 1 and 2 Variable Consumer and Investment Deficit Models Consistent?

10. Effects of Stimulus Programs on GDP, Net of Crowd Out Effects
11. Dynamic Effects
12. Alternatives to Financing Stimulus Programs with Domestic Borrowing
13. A Note on the Disposable Income Variable in the Consumption Models
14. Do Crowd Out Effects Differ in Recessions and Nonrecession Periods?
15. Does the Gale/Orszag Hypothesis Explain Tax and Spending Effects Better in Recession than Nonrecession Periods?
16. Summary of Findings and Conclusions