Abstract
Gale and Orszag argued that while not all types of stimulus are effective, some types are. This hypothesis is re-examined to determine if it might be more true in recessions than non-recession periods. Eight models were tested. The hypothesis that some forms of stimulus might be more effective than others in recessions compared to non-recession periods was not found to be supported by the data. No type of stimulus was found effective in either type of period.
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Heim, J.J. (2017). Does the Gale and Orszag Hypothesis Explain Tax and Spending Effects Better in Recessions Than Non-recession Periods?. In: Crowding Out Fiscal Stimulus. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-45967-7_15
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DOI: https://doi.org/10.1007/978-3-319-45967-7_15
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Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-319-45966-0
Online ISBN: 978-3-319-45967-7
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