The Coronavirus Stimulus Package
How Large is the Transfer Multiplier
Bibliographic Data
| ID | 9713705 |
|---|---|
| Authors | Christian Bayer (0000-0001-6369-6787, University of Bonn, CEPR, CESifo and IZA , Germany), Benjamin Born (0000-0003-1617-8025, Frankfurt School of Finance & Management), Ralph Luetticke (University of Tübingen, CEPR and CFM , Germany), Gernot J Müller (University of Tübingen, CEPR and CESifo , Germany) |
| Year | 2023 |
| Volume | 133 |
| Issue | 652 |
| Pages | 1318-1347 |
| Publication date | 2023-04-07 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (PUBLISHER • GB) |
| DOI | 10.1093/ej/uead003 |
| OpenAlex | W3034162068 |
| Language | EN |
| Citations received | 10 |
| References cited | 45 |
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
Coronavirus disease 2019 (COVID-19 · Demographic economics · Econometrics · Economics · Ex-ante · Geography · Macroeconomics · Monetary economics · Multiplier (economics · Pandemic · Payment · Quarter (Canadian coin · Stimulus (psychology · Transfer payment · Welfare · COVID-19 Pandemic Impacts · Finance · Medicine
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| Unique citing works | 10 |
|---|---|
| Citations per year | 1,67 |
| Citation span | 2020 - 2026 (7) |
| Citation velocity | current |
| Highly cited | No |
| Citation types | Neutral: 9 |