Marshall Steinbaum’s scientific contributions

What is this page?

This page lists works of an author who doesn't have a ResearchGate profile or hasn't added the works to their profile yet. It is automatically generated from public (personal) data to further our legitimate goal of comprehensive and accurate scientific recordkeeping. If you are this author and want this page removed, please let us know.

Publications (1)

Figure 1.2 Cost of Full-Time Attendance at Four-Year Public Institutions (2014-15 dollars) 
Figure 3.1 shows the total contribution of the cancellation to real GDP (in 2016 $ billions) over 10 years in all four simulations-the Fair model, the Fair model with the Fed's reaction function turned off (reported in this and subsequent figures as "no Fed" for both models), the Moody's model, and the Moody's model with no Fed reaction function. For the Fair model, the cancellation creates $943 billion in total inflation-adjusted GDP (or $94 billion per year, on average) "with the Fed," which rises to about $1,083 billion total (or $108 billion per year, on average) when the Fed is turned off. For the Moody's model, with the Fed the cancellation results in an additional $252 billion total inflation-adjusted GDP (just under $25 billion per year, on average), which rises to $861 billion total when the Fed is turned off (just under $86 billion per year, on average). 20, 21 As can be seen in Figure 3.1, three of the simulation results are very similar, while the Moody's model with the Fed presents a significantly smaller total effect on real GDP. Figure 3.2 shows the models' results for each year of the simulation. Particularly interesting is that all four simulations are similar in magnitude and pattern through 2020, though the Fair model results without the Fed are about $45 billion above the other three simulations, on average. In all four simulations, the cancellation creates a significant increase in real GDP during 2017-20 that peaks in 2018. After 2021, the increases are smaller because (1) the initial wealth effect of the cancellation is decaying over time, and (2) the government-guaranteed student loans owned by the 
Figure 3.10 presents the average multiplier effects of student debt cancellation. The multiplier effect here is the total increase in nominal GDP during the full simulation period divided by the sum of the government's total revenue loss from foregone debt service and the spending increases on debt service paid to private investors during the full simulation period (in other words, the total direct costs of the cancellation). For the Fair model, the multiplier of 1.32 (with the Fed's reaction function in place) and 1.5 (without the Fed's reaction function) are at the higher end of-though still in line with-those found in other empirical studies, though less so when one considers that part of the stimulus is from the wealth effect of private debt cancellation (Eichengreen and O'Rourke 2012; Blanchard and Leigh 2013; Zandi 2008). The multipliers in the Moody's model are smaller. With the Fed's reaction function in place, the multiplier is 0.56, which is at the low end for most studies, particularly if one considers again the wealth effect at work in the simulation. Without the Fed's interest rate reaction function, the multiplier for the Moody's model is 1.04, which is in a typical range. Again, if the economy is less sensitive to the Fed's interest rate increases 
Figure C.1 Demand for Reserve Balances in the Federal Funds Market 
THE MACROECONOMIC EFFECTS OF STUDENT DEBT CANCELLATION
  • Article
  • Full-text available

February 2018

·

946 Reads

·

20 Citations

·

Stephanie Kelton

·

·

Marshall Steinbaum
Download

Citations (1)

... However, some authors highlight potential drawbacks in policies aiming to reduce the BRAZILIAN KEYNESIAN REVIEW, 9(1), p.53-76, 1 st Semester/2023 current outstanding student debt balance. One argument against those policies is their moral hazard: canceling the outstanding balances would favor those who miscalculated the costs and benefits of the investment at the expense of those who managed to make the repayments properly (Fullwiler et al., 2018). Ultimately, this could increase the number of new borrowings because people would expect the government to cancel their debt balances again in the future. ...

Reference:

A COMMENT ON THE US STUDENT LOAN SITUATION FROM A POST-KEYNESIAN PERSPECTIVE
THE MACROECONOMIC EFFECTS OF STUDENT DEBT CANCELLATION

·

Stephanie Kelton

·

·

Marshall Steinbaum