Seminar

Past

On site & Online - The Sectoral Origins of the Spending Multiplier

Hafedh Bouakez

  • Date20 October 2021
  • Time 11h00 - 12h00
  • Room BDF Paris

Abstract

The aggregate spending multiplier crucially depends on the sectoral origin of government purchases. To establish this result, we characterize analytically the response of aggregate output to sector-specific government spending shocks in a tractable production-network economy. The response is larger when government purchases originate in sectors with a relatively small contribution to private final demand and in downstream industries. These findings hinge on the pivotal role of relative-price changes. In the special case where price adjustment is inhibited, the response of aggregate output is invariant to the origin of the spending shock. Using a quantitative multi-sector model, we show that the heterogeneity across U.S. industries translates into significant dispersion in the aggregate spending multiplier associated with sectoral government purchases. Finally, we illustrate how differences in the sectoral composition of purchases across U.S. government levels (i.e., general, federal, and state and local) lead to sizable differences in the spending multiplier.

Other seminars

Financial stability workshop - "Strategic Interaction Among AI Agents: Evidence from Payment Systems"

  • Seminar

  • Banque de France - TSE Macroeconomics Seminars

  • Date 6 November 2026

  • Place salle 4 espace conférences

  • Speaker or organiser Janet Jiang (Banque du Canada)

Details

Inflation Expectations and Wage Setting: The Role of Downward Nominal Wage Rigidity

  • Seminar

  • Banque de France - TSE Macroeconomics Seminars

  • Date 3 November 2026

  • Place Online and room E336

  • Speaker or organiser Sarah Lein (University of Basel)

Details

Past

Pre-Trends Ahead of Monetary Policy Surprises: Recovering the Response of Corporate Investment

  • Seminar

  • Banque de France - TSE Macroeconomics Seminars

  • Date 13 October 2026

  • Place Online and Room 4 conference space

  • Speaker or organiser Antoine Hubert de Fraisse (London School of Economics)

Details