Did the stimulus work? A review of the nine best studies on the subject

Discussion in 'Economy' started by Synthaholic, Aug 25, 2011.

  1. Synthaholic
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    Synthaholic Platinum Member

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    Did the stimulus work? A review of the nine best studies on the subject




    Here are the nine studies, organized by the conclusion and method used. Click on each one to see my summary of the study, how it reached its conclusions, and potential problems with its approach.




    It worked (econometric):
    Feyrer and Sacerdote. Chodorow-Reich, Feiveson, Liscow, and Woolston. Wilson.

    It worked (modeling):
    Congressional Budget Office. Council of Economic Advisors. Zandi and Blinder.

    It worked a little bit (modeling):

    Oh and Reis.

    It didn’t work (econometric):

    Conley and Dupor. Taylor.



    As the descriptions above make clear, none of the studies are flawless. But while the optimistic studies do, in fact, support the conclusion that the stimulus worked, there is some reason to doubt that the pessimistic studies support the conclusion that it failed. Conley and Dupor found a negative effect on employment and output but, as they concede and critics of the study have emphasized, their results are not statistically significant. Taylor found that the stimulus did not increase government purchases significantly but, as Noah Smith argued, this result could be consistent with the stimulus increasing employment and output. Oh and Reis found a small multiplier for tax transfers of the kind found in the stimulus package, but as they concede, their model produces estimates for key figures that are empirically implausible. Using more plausible figures produces a significantly larger multiplier, meaning the package was more effective than the model initially suggested. Due to these issues, I’m inclined to believe that the preponderance of evidence indicates the stimulus worked.
     
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  2. Oddball
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    Oddball BANNED Supporting Member

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    Problem being that none of that dreck is falsifiable or objectively verifiable in any way.

    But it surely did work for filling the coffers of state bureaucrat pension funds and feather the nests of AFSCME union goons.
     
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  3. Avorysuds
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    Avorysuds Gold Member

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    Yes, it worked... at not meeting a single benchmark set but Obama and his team.
     
  4. Synthaholic
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    Synthaholic Platinum Member

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    Wow! You were able to read and analyze all nine studies in only 8 minutes, to come up with your conclusions?



    Your opinions are preselected, predetermined, and wingnut approved.

    Dismissed.
     
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  5. Oddball
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    Oddball BANNED Supporting Member

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    You don't understand the concept of falsifiability, do you?
     
  6. Flopper
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    Flopper Gold Member

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    Success depends on how you define success. If you are one of the several million who got jobs since the stimulus package became law, then likely you see it as a success. But if you lost your job and remain unemployed, then it was certainly a failure.
     
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  7. Ravi
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    Ravi Diamond Member

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    Certainly you haven't just noticed this?
     
  8. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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    By its own stated objectives (unemployment peaking at 8%), the stimulus was an epic fail.

    It's also quite representative of why most government programs fail - they don't meet a measurable objective. In the private sector, such programs would be cancelled due to being Bad Investments.
     
  9. Synthaholic
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    Synthaholic Platinum Member

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    I understand the concept of wingnuts.
     
  10. Ravi
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    Ravi Diamond Member

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    And the businesses would have gone out of business.

    The USA is not a business.
     

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