巴德 宏观经济学原理（英文版·第8版）Chapter 14 Eye Ons.pptxVIP

14EYE ONSAggregate ExpenditureMultiplier Christina Romer, former Chair of the President’s Council of Economic Advisers (CEA), has estimated the government expenditure multiplier to be 1.6.This number led administration economists to predict that the stimulus plan that increased government expenditure would prevent the unemployment rate from rising much above 8 percent.This prediction turned out to be optimistic.One reason might be that the multiplier assumption was also too optimistic. Robert Barro, a leading macroeconomist at Harvard University, has studied the effects of very large increases in government expenditure during wars.Barro finds that the multiplier is only 0.8.Barro’s multiplier means that real GDP increases by less than the increase in government expenditure.The reason is that some private expenditure, mainly investment, gets “crowded out” and real GDP falls. John Taylor of Stanford University, another leading macroeconomist, agrees with Barro that the government expenditure multiplier is less than 1.Taylor says that crowding out gets more severe as time passes.So Taylor says that the multiplier gets smaller after two years and smaller still after three years.The figure on the next slide shows the range on estimates of the expenditure multiplier. A big multiplier can occur only if there is substantial slack in the economy—when the recessionary gap is large. The line CF60 is an estimate of the U.S. consumption function between 1960s.The slope of the consumption function—the marginal propensity to consume—is 0.87.Each blue dot represents consumption expenditure and disposable income in the United States for a year between 1960 and 2015. The line CF15 is an estimate of the U.S. consumption function in 2015.The consumption function shifted upward from the 1960s to 2015 … because economic growth brought higher expected future income and higher wealth, which increased autonomous consumption. During the recession of 2009, the consumption function temporar