Fiscal stimulus boosts economy with large multipliers, targeted spending effective
The study looked at how different types of government spending affect the economy. They used seven different models to see the impact of fiscal stimulus on the economy. The results showed that spending and targeted transfers have the biggest positive effect on the economy. It's best if the government spends money consistently and if the central bank supports these efforts. However, if the government increases spending or deficits permanently, the initial positive impact is lower.