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New post by Olivier Cardi and Romain Restout

23 October 2023 Blog
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Efficiency of public spending: how productivity gains boost the multiplier effect

By Olivier Cardi, senior lecturer in macroeconomics at Lancaster University Management School (United Kingdom) and Romain Restout, maître de conférences at Université de Lorraine (Nancy)

This post presents the main findings of a recent study, published in the Journal of International Economics, on the multiplier effect of public spending. Based on a discussion of the work carried out by Ethan Ilzetzki, who showed that public orders in the field of armaments in wartime significantly improved firm productivity, through a "learning-by-necessity" channel, we show that this technological channel also operates in peacetime.

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