Our new research shows no evidence of a Keynesian ‘multiplier’ effect. There is evidence that tax cuts boost growth.
Harvard economist Robert Barro is one of the leading researchers on the empirical evidence for Keynesian ‘multiplier’ effects. Here is an Oct 1, 2009 Barro op-ed summarizing recent research. (This op-ed is based on a working paper issued by the National Bureau of Economic Research in September). Here is the introduction:
The global recession and financial crisis have refocused attention on government stimulus packages. These packages typically emphasize spending, predicated on the view that the expenditure “multipliers” are greater than one—so that gross domestic product expands by more than government spending itself. Stimulus packages typically also feature tax reductions, designed partly to boost consumer demand (by raising disposable income) and partly to stimulate work effort, production and investment (by lowering rates).
The existing empirical evidence on the response of real…
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Utopia, you are standing in it! 
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