The Coronavirus Stimulus Package: How Large is the Transfer Multiplier

• 成果类型: Article
• 署名作者: Bayer, Christian; Born, Benjamin; Luetticke, Ralph; Mueller, Gernot J.
• 署名单位: Eberhard Karls University of Tubingen; University of Bonn; Center for Economic & Policy Research (CEPR); Leibniz Association; Ifo Institut; IZA Institute Labor Economics; Frankfurt School Finance & Management; Leibniz Association; Ifo Institut; Eberhard Karls University of Tubingen
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1093/ej/uead003
• 发表日期: 2023
• 页码: 1318-1347
• 关键词: business; Covid-19; income

摘要

In response to the COVID-19 pandemic, large parts of the economy were locked down and, as a result, households' income risk rose sharply. At the same time, policy makers put forward the largest stimulus package in history. In the United States it amounted to $2 trillion, a quarter of which represented transfer payments to households. To the extent that such transfers were (i) announced in advance and (ii) conditional on recipients being unemployed, they mitigated income risk associated with the lockdown-in contrast to unconditional transfers. We develop a baseline scenario for a COVID-19 recession in a medium-scale heterogeneous agent new Keynesian model and use counterfactuals to quantify the impact of transfers. For the short run, we find large differences in the transfer multiplier: it is negligible for unconditional transfers and about unity for conditional transfers. Overall, we find that the transfers reduced the output loss due to the pandemic by some two percentage points at its trough.