Showing posts with label tutor2U stimulus multipliers negative. Show all posts
Showing posts with label tutor2U stimulus multipliers negative. Show all posts

Thursday, September 3, 2009

tutor2U must include negative multipliers

In this post they talk about multipliers from government spending.

"If the $10bn increase [in government spending] caused total United States economic output to rise by $5bn, the multiplier would be 0.5; if it rose by $15bn, the multiplier would be 1.5."

It can also drop by $5 billion, making the multiplier -.5. There are many, many, many multipliers that have negative value. Norm Mineta's San Jose Light Rail fiasco, for example. Many economists consider this depression to be the result of a negative multipliers, from lil Bush.