Ten Years after the Financial Crisis: What Have We Learned from the Renaissance in Fiscal Research?

NBER Working Paper No. 25531

Issued in February 2019

NBER Program(s):Economic Fluctuations and Growth, Monetary Economics



This paper takes stock of what we have learned from the “Renaissance” in fiscal research in the ten years since the financial crisis. I first summarize the new innovations in methodology and discuss the various strengths and weaknesses of the main approaches. Reviewing the estimates, I come to the surprising conclusion that the bulk of the estimates for average spending and tax change multipliers lie in a fairly narrow range, 0.6 to 1 for spending multipliers and -2 to -3 for tax change multipliers. However, I identify economic circumstances in which multipliers lie outside those ranges. I conclude by reviewing the debate on whether multipliers were higher on the stimulus spending in the U.S. and the fiscal consolidations in Europe.

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Document Object Identifier (DOI): 10.3386/w25531

Published: Valerie A. Ramey, 2019. "Ten Years After the Financial Crisis: What Have We Learned from the Renaissance in Fiscal Research?," Journal of Economic Perspectives, vol 33(2), pages 89-114. citation courtesy of