Keynesian government spending multipliers and spillovers in the euro area

The global financial crisis has lead to a renewed interest in discretionary fiscal stimulus. Advocates of discretionary measures emphasize that government spending can stimulate additional private spending — the Keynesian multiplier effect. Thus, we investigate whether the spending package announced by Euro area governments for 2009 and 2010 is likely to boost GDP by more than one for one. Because of modeling uncertainty, it is essential that such policy evaluations be robust to alternative modeling assumptions and parameterizations. We use five different empirical macroeconomic models with Keynesian features such as price and wage rigidities to evaluate the impact of the fiscal stimulus. Four of them suggest that the planned increase in government spending will reduce private consumption and investment significantly. Only a model that largely ignores the forward-looking behavioral response of consumers and firms implies crowding-in of private spending. We review a range of issues that may play a role in the recession of 2008-2009. Implementation lags are found to reinforce crowding-out and may even cause an initial contraction. Zero-bound effects may lead the central bank to abstain from interest rate hikes and increase the GDP impact of government spending. Crowding-in, however, requires an immediate anticipation of at least two years at the zero bound. Using a multi-country model, we find that spillovers between euro area countries are negligible or even negative, because direct demand effects are offset by the indirect effect of an euro appreciation. New-Keynesian DSGE models provide a strong case for government savings packages. Announced with sufficient lead time, spending cuts induce a significant short-run stimulus and crowding-in of private spending. JEL Classification: E62, E63, H31Fiscal Policy, government spending multipliers, Model uncertainty, New-Keynesian models

New Keynesian Versus Old Keynesian Government Spending Multipliers

Renewed interest in fiscal policy has increased the use of quantitative models to evaluate policy. Because of modelling uncertainty, it is essential that policy evaluations be robust to alternative assumptions. We find that models currently being used to evaluate fiscal policy stimulus proposals are not robust. Government spending multipliers in an alternative empirically-estimated and widely-cited new Keynesian model are much smaller than in these old Keynesian models; the estimated stimulus is extremely small with GDP and employment effects only one-sixth as large and with private sector employment impacts likely to be even smaller.Keynesianism, fiscal policy, fiscal stimulus, multiplier

New Keynesian versus old Keynesian government spending multipliers

Renewed interest in fiscal policy has increased the use of quantitative models to evaluate policy. Because of modeling uncertainty, it is essential that policy evaluations be robust to alternative assumptions. We find that models currently being used in practice to evaluate fiscal policy stimulus proposals are not robust. Government spending multipliers in an alternative empirically-estimated and widely-cited new Keynesian model are much smaller than in these old Keynesian models; the estimated stimulus is extremely small with GDP and employment effects only one-sixth as large

New Keynesian versus old Keynesian government spending multipliers

Renewed interest in fiscal policy has increased the use of quantitative models to evaluate policy. Because of modelling uncertainty, it is essential that policy evaluations be robust to alternative assumptions. We find that models currently being used in practice to evaluate fiscal policy stimulus proposals are not robust. Government spending multipliers in an alternative empirically-estimated and widely-cited new Keynesian model are much smaller than in these old Keynesian models; the estimated stimulus is extremely small with GDP and employment effects only one-sixth as large. JEL Classification: C52, E62fiscal multiplier, Fiscal Stimulus, government spending, Macroeconomic Modeling, New Keynesian Model

A new comparative approach to macroeconomic modeling and policy analysis

In the aftermath of the global financial crisis, the state of macroeconomic modeling and the use of macroeconomic models in policy analysis has come under heavy criticism. Macroeconomists in academia and policy institutions have been blamed for relying too much on a particular class of macroeconomic models. This paper proposes a comparative approach to macroeconomic policy analysis that is open to competing modeling paradigms. Macroeconomic model comparison projects have helped produce some very influential insights such as the Taylor rule. However, they have been infrequent and costly, because they require the input of many teams of researchers and multiple meetings to obtain a limited set of comparative findings. This paper provides a new approach that enables individual researchers to conduct model comparisons easily, frequently, at low cost and on a large scale. Using this approach a model archive is built that includes many well-known empirically estimated models that may be used for quantitative analysis of monetary and fiscal stabilization policies. A computational platform is created that allows straightforward comparisons of models’ implications. Its application is illustrated by comparing different monetary and fiscal policies across selected models. Researchers can easily include new models in the data base and compare the effects of novel extensions to established benchmarks thereby fostering a comparative instead of insular approach to model development

New Keynesian versus Old Keynesian Government Spending Multipliers

Renewed interest in fiscal policy has increased the use of quantitative models to evaluate policy. Because of modelling uncertainty, it is essential that policy evaluations be robust to alternative assumptions. We find that models currently being used in practice to evaluate fiscal policy stimulus proposals are not robust. Government spending multipliers in an alternative empirically-estimated and widely-cited new Keynesian model are much smaller than in these old Keynesian models; the estimated stimulus is extremely small just when needed most, and GDP and employment effects are only one-sixth as large, with private sector employment impacts likely to be even smaller.

Ga-68-PSMA ligand PET/CT in patients with prostate cancer: How we review and report

Recently, positron emission tomography (PET) imaging using PSMA-ligands has gained high attention as a promising new radiotracer in patients with prostate cancer (PC). Several studies promise accurate staging of primary prostate cancer and restaging after biochemical recurrence with Ga-68-PSMA ligand Positron emission tomography/computed tomography (PET/CT). However, prospective trials and clinical guidelines for this new technique are still missing. Therefore, we summarized our experience with Ga-68-PSMA ligand PET/CT examinations in patients with primary PC and biochemical recurrence. It focuses on the technical and logistical aspects of Ga-68-PSMA ligand PET/CT examination as well as on the specific background for image reading discussing also potential pitfalls. Further, it includes relevant issues on free-text as well as structured reporting used in daily clinical routine

Ga-68-PSMA ligand PET/CT in patients with prostate cancer: How we review and report

Recently, positron emission tomography (PET) imaging using PSMA-ligands has gained high attention as a promising new radiotracer in patients with prostate cancer (PC). Several studies promise accurate staging of primary prostate cancer and restaging after biochemical recurrence with Ga-68-PSMA ligand Positron emission tomography/computed tomography (PET/CT). However, prospective trials and clinical guidelines for this new technique are still missing. Therefore, we summarized our experience with Ga-68-PSMA ligand PET/CT examinations in patients with primary PC and biochemical recurrence. It focuses on the technical and logistical aspects of Ga-68-PSMA ligand PET/CT examination as well as on the specific background for image reading discussing also potential pitfalls. Further, it includes relevant issues on free-text as well as structured reporting used in daily clinical routine

Pkw-Maut, Sonderabgabe oder Sonderfonds: Sinnvolle Instrumente zur Finanzierung der Verkehrsinfrastruktur?

Im April dieses Jahres überraschte Torsten Albig, Ministerpräsident des Landes Schleswig-Holstein, mit dem Vorschlag, zur Finanzierung der nötigen Infrastruktursanierung eine Sonderabgabe von allen Nutzern zur Wartung und zur Reparatur der Straßen zu verlangen. Ist dieser geplante Sonderfonds ein sinnvolles Finanzierungsinstrument? Nach Ansicht von Gernot Sieg, Universität Münster, verschärfen eine Sonderabgabe und ein Sonderfonds »Reparatur Deutschland« die Anreize, die zum Unterfinanzierungsproblem geführt haben. Eine Vignette dagegen könne, gekoppelt mit dem Ausbau der Verkehrsinfrastrukturfinanzierungsgesellschaft zu einem Bundesfernstraßenfonds, das Problem des Verfalls der Bundesfernstraßen lösen. Zudem würden die Autofahrer durch die Vignette »lernen«, dass man für die Nutzung von Autobahnen bezahlen müsse. Dies sei ein wichtiger Schritt in die richtige Richtung: Ist die »Umsonst-Mentalität« beendet, dann sind die nächsten Schritte zur auslastungs- und entfernungsabhängigen Maut politisch einfacher durchsetzbar. Für Bernhard Wieland, Technische Universität Dresden, besteht der Charme des Albigschen Vorschlags in der vergleichsweise raschen Realisierbarkeit, denn dass umgehend gehandelt werden müsse, darin seien sich alle Kommissionen und Experten einig. Eine Ausweitung der Lkw-Maut oder die Einführung einer auch nur rudimentär räumlich und zeitlich differenzierten Pkw-Maut erfordere einen längeren Zeitraum. Günter Knieps, Universität Freiburg, sieht die Zeit reif für eine »intelligente« Pkw-Maut. Eine zeitraumbezogene Vignettenlösung gehe das Stauproblem nicht an. Ein aktives Engpassmanagement auf Straßeninfrastrukturen mache es erforderlich, sämtliche Fahrzeuge, Lkw und Pkw, einzubeziehen und gleichzeitig eine auslastungsabhängige zeitlich und örtlich variierende Maut zu erheben. In der Vergangenheit scheiterten Überlegungen, auslastungsabhängige Benutzungsgebühren im Straßenverkehr zu erheben, an den technischen Möglichkeiten. In den letzten Jahren sei abe

Spin controlled atom-ion inelastic collisions

The control of the ultracold collisions between neutral atoms is an extensive and successful field of study. The tools developed allow for ultracold chemical reactions to be managed using magnetic fields, light fields and spin-state manipulation of the colliding particles among other methods. The control of chemical reactions in ultracold atom-ion collisions is a young and growing field of research. Recently, the collision energy and the ion electronic state were used to control atom-ion interactions. Here, we demonstrate spin-controlled atom-ion inelastic processes. In our experiment, both spin-exchange and charge-exchange reactions are controlled in an ultracold Rb-Sr$^+$ mixture by the atomic spin state. We prepare a cloud of atoms in a single hyperfine spin-state. Spin-exchange collisions between atoms and ion subsequently polarize the ion spin. Electron transfer is only allowed for (RbSr)$^+$ colliding in the singlet manifold. Initializing the atoms in various spin states affects the overlap of the collision wavefunction with the singlet molecular manifold and therefore also the reaction rate. We experimentally show that by preparing the atoms in different spin states one can vary the charge-exchange rate in agreement with theoretical predictions