The Time for Austerity: Estimating the Average Treatment Effect of Fiscal Policy

• 成果类型: Article
• 署名作者: Jorda, Oscar; Taylor, Alan M.
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - San Francisco; University of California System; University of California Davis; National Bureau of Economic Research; Centre for Economic Policy Research - UK
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/ecoj.12332
• 发表日期: 2016
• 页码: 219-255
• 关键词: regression-models; propensity score; monetary-policy; identification; expansionary

摘要

After the Global Financial Crisis, a controversial rush to fiscal austerity followed in many countries. Yet research on the effects of austerity on macroeconomic aggregates was and still is unsettled, mired by the difficulty of identifying multipliers from observational data. This article, reconciles seemingly disparate estimates of multipliers within a unified and state-contingent framework. We achieve identification of causal effects with new propensity-score based methods for time series data. Using this novel approach, we show that austerity is always a drag on growth, and especially so in depressed economies: a 1% of GDP fiscal consolidation translates into a loss of 3.5% of real GDP over five years when implemented in a slump, rather than just 1.8% in a boom.