Scholarly Comments on Academic Economics

Unconventional Confidence Bands in the Literature on the Government Spending Multiplier

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Abstract

Macroeconomists have applied many versions of vector autoregression to measuring the size of the government spending multiplier. Very frequently in the literature on that multiplier, the statistical significance of results is held to an unconventionally low standard of one standard error. This paper will document the pervasiveness of the issue among thirty-one papers. Five of the six papers with at least 500 Google citations use that unconventionally narrow band.

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Volume (Issue)
Pages
72-83
Published
JEL classification
C32, E62
Keywords
Vector autoregression, fiscal multipliers, spending multipliers
Downloads
5,447 article downloads
5,779 complete issue downloads
Total: 11,226

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