Heterogeneous Spending, Heterogeneous Multipliers

Download or read book Heterogeneous Spending, Heterogeneous Multipliers written by Umberto Muratori and published by International Monetary Fund. This book was released on 2023-03-10 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: Do local fiscal multipliers depend on what the government purchases? We find that government purchases of services have larger effects on employment than spending on goods. Industries producing services are more labor-intensive than industries producing goods. This heterogeneity in labor intensity is an important mechanism behind these results. Spending directed toward labor-intensive industries generates stronger increases in employment and labor income relative to spending toward non-labor-intensive industries.