The Young, the Old, and the Government: Demographics and Fiscal Multipliers

• 成果类型: Article
• 署名作者: Basso, Henrique S.; Rachedi, Omar
• 署名单位: Banco de Espana; Universitat Ramon Llull; Escuela Superior de Administracion y Direccion de Empresas (ESADE)
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MACROECONOMICS
• ISSN/ISSBN: 1945-7707
• DOI: 10.1257/mac.20190174
• 发表日期: 2021
• 页码: 110-141
• 关键词: stimulus; debt; substitution; expenditure; consumption

摘要

We document that government spending multipliers depend on the population age structure. Using the variation in military spending and birth rates across US states, we show that the local fiscal multiplier is 1.5 and increases with the population share of young people, implying multipliers of 1.1-1.9 in the -interquartile range. A parsimonious -life cycle -open economy New Keynesian model with credit market imperfections and -age-specific differences in labor supply and demand explains 87 percent of the relationship between local multipliers and demographics. The model implies that the US population aging between 1980 and 2015 caused a 38 percent drop in national government spending multipliers.