Using Mafia Infiltration to Estimate the Multiplier

An economist studies the impact of a government spending increase in Country A, which is currently in a deep recession with high unemployment, and estimates a spending multiplier of 2.1. A second economist conducts a similar study in Country B, which is experiencing an economic boom with near-full employment, and finds a multiplier of 0.8. Which of the following provides the most likely economic explanation for this difference in the estimated multiplier?

Analyzing Discrepant Multiplier Estimates

Challenges in Estimating the Fiscal Multiplier

Policy Implications of Multiplier Estimates