The results in Table 5 are usefully related to the impulse responses in Figures 10
through 12. For the tax cut the maximum multipliers occur after two or more years,
whereas for the balanced budget and deficit spending scenarios the maximum effects
occur at short lags and the minimum effects at longer lags. Since the variance of the
impulse responses for these scenarios appears to increase at longer lag lengths, we also
look at the maximum and minimum multipliers of the two spending scenarios in the
first year after the initial shock. In this case we now get the result that the deficit
spending scenario’s minimum multiplier is insignificantly different from zero but that for
the balanced budget spending scenario is still significantly negative.