Bain Capital, LLC
111 Huntington Avenue
Boston MA 02199
Institutional Affiliation: Harvard University
NBER Working Papers and Publications
|September 2009||Macroeconomic Effects from Government Purchases and Taxes|
with Robert J. Barro: w15369
For U.S. annual data that include WWII, the estimated multiplier for temporary defense spending is 0.4-0.5 contemporaneously and 0.6-0.7 over two years. If the change in defense spending is "permanent" (gauged by Ramey's defense-news variable), the multipliers are higher by 0.1-0.2. The estimated multipliers are all significantly less than one and apply for given average marginal income-tax rates. We cannot estimate reliable multipliers for non-defense purchases because of the lack of good instruments. Since the defense-spending multipliers are less than one, greater spending crowds out other components of GDP, mainly investment, but also non-defense government purchases and net exports. Consumer expenditure on non-durables and services has only a small response. In a post-1950 sample, inc...
Published: “Macroeconomic Effects of Government Purchases and Taxes” (with C.J. Redlick), Quarterly Journal of Economics , February 2011. citation courtesy of
|October 2008||Social Capital and Urban Growth|
with Edward L. Glaeser: w14374
Social capital is often place-specific while schooling is portable, so the prospect of migration may reduce the returns to social capital and increase the returns to schooling. If social capital matters for urban success, it is possible that an area can get caught in a bad equilibrium where the prospect of out-migration reduces social capital investment and a lack of social capital investment makes out-migration more appealing. We present a simple model of that process and then test its implications. We find little evidence to suggest that social capital is correlated with either area growth or rates of out-migration. We do, however, find significant differences in the returns to human capital across space, and a significant pattern of skilled people disproportionately leaving declinin...
Published: Published online before print June 12, 2009, doi: 10.1177/0160017609336079 International Regional Science Review July 2009 vol. 32 no. 3 264-299