More Opinions on Multipliers

So here we have the opinions of two more economists about the multipliers in the Stimulus Plan. GARY S. BECKER and KEVIN M. MURPHY from the University of Chicago weigh in via this article. Now Becker is not just "any economist." He holds a Nobel Prize. Becker and Murphy conclude:

So our conclusion is that the net stimulus to short-term GDP will not be zero, and will be positive, but the stimulus is likely to be modest in magnitude. Some economists have assumed that every $1 billion spent by the government through the stimulus package would raise short-term GDP by $1.5 billion. Or, in economics jargon, that the multiplier is 1.5.

That seems too optimistic given the nature of the spending programs being proposed. We believe a multiplier well below one seems much more likely.

For something so important, it seems like there ought to be a lot more agreement that the multiplier is greater than 1 before we hop on this train!