Misunderstanding Economic Stimulus Multipliers

Abstract

With the passage of the federal stimulus bill and the proposal of an infrastructure bonding plan in Iowa to address the state’s looming infrastructure needs, there have also been many announcements from state and federal elected officials about the job impacts that the state will expect.  The announcements of huge job impacts from state or federal spending belie fundamental misunderstandings about jobs multipliers.  This research explains the type of job impacts that state and federal stimulus spending will generate in Iowa.