Economist's View has a remarkable thread off a study summarizing the multiplier effect on GDP from infrastructure spending. The paper concludes that the multiplier is one, but the thread makes it clear (a) that plenty of smart, well-informed people do not agree; and (b) that macro, taken as a whole, remains disturbingly close to phrenology.
Recall: phrenology--the "science" of studying head-bumps--was not exactly wrong; there is indeed a geography of the brain, and we can learn important stuff by tracking what happens where. But in its long infancy, the name "phrenology" was pretty much a synonym for "charlatanism' (the correlation is one?). I wouldn't go so far as to say that macro is charlatanism, although god knows there is plenty of charlatanism on the fringes of macro. And the Thoma thread makes it pretty clear that for all the effort and energy, we've made embarrassingly little progress towards reaching a consensus on what works and what does not ("reasonable minds may differ"="local mileage may vary"="whirl is king, Zeus being dead").
Meanwhile people who ought to know better have a new mantra.
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The reasonable range appears to be 1.4 (Ramey's actual estimate) to 1.8 (Rodrik's, among others).
That Woodward and Hall are silly enough to try to argue that the multiplier is one due to its having been so during a period of rationing (since consumers couldn't spend, and military spending at best has a multiplier of 1.0, we should rather be surprised it was that high) is a strong indicator (Daniel Davies's First Law) that the multiplier is above 1.0 if you let it be so.
That Mankiw has to lie about Romer^2 tells us all we need to know about the tax cut side of the argument. (Davies's First Law, again.)
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