Journal Article
Cross-Region Transfer Multipliers in a Monetary Union : Evidence from Social Security and Stimulus Payments

Download

Published
2021-05
Journal
American Economic Review 111(5):1689-1719Author(s)
Metadata
Abstract
US federal transfers to individuals are large, countercyclical, vary geographically, and are often credited with helping to stabilize regional economies. This paper estimates the short-run effects of these transfers using plausibly exogenous regional variation in temporary stimulus payments and permanent Social Security benefit increases. States that received larger transfers tended to grow faster contemporaneously, with a multiplier of around 1.5 for permanent transfers and 1/3 for temporary transfers. Results are broadly consistent with an open-economy New Keynesian model. At business cycle frequencies, cross-region transfer multipliers are not large, suggesting only modest gains in regional stabilization from US federal automatic stabilizers.Collection(s)
This item appears in the following Collection(s)
Associated content
Journal website (version of record)Users also downloaded
-
-
-
Related items
Showing items related by title, author, creator and subject.
-
-
-
Follow World Bank Publications on Facebook, Twitter or Linked-In