Are Fiscal Multipliers Estimated with Proxy‐SVARs Robust?*

We estimate government spending and tax multipliers in the United States via a flexible proxy-SVAR model, where identification is achieved by combining fiscal non-fiscal instruments with additional parametric restrictions. find that, while multiplier robustly estimated to be larger than one across different models, of sensitive combination that we use. unveil key factor behind these heterogeneous estimates assumption orthogonality between total productivity (our main proxy) shock. If this imposed, around one. it not three times as large. Our results point need accounting for large uncertainty surrounding design optimal policies.