In preparing their estimates of the stimulus package's effect on GDP,Obama administration economists estimated a government purchases multiplier of 1.57.Economist Robert Barro argues that ________,the government purchases multiplier would be lower than the administration's estimate,and economists Lawrence Christiano,Martin Eichenbaum,and Sergio Rebelo argued that ________,the multiplier would be higher than the administration's estimate.

Question

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Barro argues that during wartime, the multiplier is lower due to crowding out of private investment. Christiano, Eichenbaum, and Rebelo argue that when short-term interest rates are near zero, the multiplier is higher because monetary policy is less effective, making fiscal policy more impactful.

In Preparing Their Estimates of the Stimulus Package's Effect on GDP,Obama