Who believes in fiscal and monetary stimulus?

David, Amdur (2012): Who believes in fiscal and monetary stimulus?

Abstract

Does the public believe that fiscal and monetary stimulus reduce unemployment? I present survey evidence on this question from a random sample of Pennsylvania residents. Few respondents express a consistently Keynesian view of fiscal and monetary stimulus. In fact, the typical respondent believes that an increase in government spending makes unemployment worse. Views on monetary stimulus depend on how the question is framed. The typical respondent believes that Fed money creation worsens unemployment while a Fed interest rate cut improves it. I show how opinion varies by political party, educational attainment, income, and other demographic characteristics. Favorable opinions about government spending are strongly associated with support for President Obama's economic policies, even after controlling for political party and for respondents' opinions about the current state and trajectory of the economy.

• Item Type: MPRA Paper
• Language: English
• Keywords: Opinion survey; fiscal stimulus; monetary stimulus; unemployment; Keynesian economics
• Subjects: E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E62 - Fiscal Policy; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E12 - Keynes ; Keynesian ; Post-Keynesian; A - General Economics and Teaching > A2 - Economic Education and Teaching of Economics > A20 - General; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy

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