LEARNING AND THE SIZE OF THE GOVERNMENT SPENDING MULTIPLIER – ERRATUM

Extract

Table 4 of this article was incorrectly published with subheadings in Table 4 missing. The publisher regrets this error and the correct version of Table 4 is presented here.Table 4.

Present-value multipliers for different specifications of fiscal policy in the new Keynesian model with rational expectations and with adaptive learning

	Rational expectations				Adaptive learning
	Impact	1 year	4 years	6 years	Impact	1 year	4 years	6 years
Strategy 1: Lump-sum financing (baseline model)
$\frac{{PV\left( {\Delta Y} \right)}}{{PV\left( {\Delta G} \right)}}\$	0.51	0.50	0.46	0.43	1.01	1.00	0.99	0.97
$\frac{{PV\left( {\Delta C} \right)}}{{PV\left( {\Delta G} \right)}}\$	−0.29	−0.30	−0.34	−0.37	0.09	0.09	0.07	0.06
$\frac{{PV\left( {\Delta I} \right)}}{{PV\left( {\Delta G} \right)}}\$	−0.20	−0.20	−0.20	−0.20	−0.08	−0.08	−0.09	−0.09
Strategy 2: Capital tax financing
$\frac{{PV\left( {\Delta Y} \right)}}{{PV\left( {\Delta G} \right)}}\$	0.32	0.29	0.12	0.02	0.43	0.38	0.20	0.08
$\frac{{PV\left( {\Delta C} \right)}}{{PV\left( {\Delta G} \right)}}\$	−0.23	−0.26	−0.40	−0.48	−0.08	−0.12	−0.27	−0.37
$\frac{{PV\left( {\Delta I} \right)}}{{PV\left( {\Delta G} \right)}}\$	−0.68	−0.69	−0.70	−0.71	−0.80	−0.80	−0.81	−0.82
Strategy 3: Labor tax financing
$\frac{{PV\left( {\Delta Y} \right)}}{{PV\left( {\Delta G} \right)}}\$	−0.64	−0.68	−0.85	−0.95	0.48	0.47	0.43	0.40
$\frac{{PV\left( {\Delta C} \right)}}{{PV\left( {\Delta G} \right)}}\$	−1.07	−1.10	−1.24	−1.33	−0.37	−0.38	−0.41	−0.43
$\frac{{PV\left( {\Delta I} \right)}}{{PV\left( {\Delta G} \right)}}\$	−0.71	−0.71	−0.73	−0.74	−0.17	−0.18	−0.18	−0.18

Note: See main text for a description of the different financing strategies.