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Working Paper

Is the supermultiplier nil? - A Replication Study of Deleidi and Mazzucato (2021)

Authors

  • Boysen-Hogrefe
  • J.

Publication Date

Key Words

Fiscal multipliers

innovation policy

Related Topics

Innovation and Structural Change

Fiscal Policy & National Budgets

Analyzing US macro data via a structural vector-autoregressive model, Deleidi and Mazzucato (2021) find strong positive spillover of mission-oriented government spending on private research and development activity and on overall economic dynamism ("crowding in"). However the result hinges on specific transformation of the data. Deleidi and Mazzucato deflate all variables in their model via the GDP deflator. Applying originally price adjusted data a spillover on GDP cannot be found. Estimating the model with data starting in 1984, the results point at “crowding out” of private research and development activity.

Kiel Institute Expert

  • Prof. Dr. Jens Boysen-Hogrefe
    Kiel Institute Researcher

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