Government stimulus does not produce the same economic payoff simply because money is spent. Evidence from stimulus checks, defense purchases, and infrastructure shows that the size—and timing—of the multiplier depends heavily on how government spends the money.
Not all forms of fiscal stimulus produce the same economic payoff. Evidence from the 2008 US rebates and Singapore suggests that temporary payments to households had only a limited effect on overall consumer spending. Government purchases tend to produce larger short-term gains, while infrastructure can generate stronger benefits over time. Ramey’s broader conclusion is that fiscal stimulus usually delivers less growth than its strongest advocates expect.
Valerie Ramey
Videos
Could Medicare face insolvency as soon as 2033? Hoover’s Tom Church examines the looming funding crisis, the challenges of entitlement reform, and the risks of Medicare for All.
October 9, 2026
Now that 30 days are more than up, my contract with the Wall Street Journal allows me to publish the whole op/ed I wrote on Proposition 40.
October 8, 2026
Is the Gross Domestic Product (GDP) of a country a good measure of economic wellbeing? No, it’s not.
October 8, 2026