Assessing the Short-Term Effects on Output of Changes in Federal Fiscal Policies (Working Paper Series)

Abstract

Changes in federal fiscal policies can have both short-term and long-term effects on output. The Congressional Budget Office s analysis of the short-term effects focuses on the impact on the demand for goods and services. That impact can be decomposed into direct effects and indirect effects: Direct effects consist of changes in purchases of goods and services by federal agencies and by the people and organizations who are recipients of federal payments or payers of federal taxes; indirect effects enhance or offset the direct effects. The indirect effects can be summarized by a demand multiplier, defined as the total change in gross domestic product per dollar of direct effect on demand. This paper presents the ranges of demand multipliers that CBO uses in its analyses and reviews evidence on the size of those multipliers.

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Document Details

Document Type
Technical Report
Publication Date
May 01, 2012
Accession Number
ADA562145

Entities

People

  • Charles Whalen
  • Felix Reichling

Organizations

  • Congressional Budget Office

Tags

Communities of Interest

  • Human Systems

DTIC Thesaurus Topics

  • Budgets
  • Business Administration
  • Commerce
  • Economic Impact
  • Economic Policy
  • Economics
  • Employment
  • Governments
  • International Organizations
  • Investments
  • Local Governments
  • Macroeconomics
  • Monetary Policy
  • Money
  • National Governments
  • Public Policy
  • United States

Fields of Study

  • Economics

Readers

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  • Government and Public Administration Law.
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