You're right. I'm using a conservative estimate of the multiplier, which ironically implies a higher required stimulus. Alternatively, I could use a more optimistic estimate that would imply less need for stimulus. --mbs
> So if the multiplier is 1.5, must we advocate a $333 billion > stimulus on an annual basis to force unemployment down > to 4.5%? mbs > > Why would the spending multiplier be this low? If, simplifying > very radically, it's 1/1-mpc+mpc(t)+mpm, and the tax rate is > going down, and generally mpc is, what?, .6 or something, then > why wouldn't the multiplier be much higher, like in the 2.5- 3 range? > Christian
