Cross-Region Transfer Multipliers in a Monetary Union: Evidence from Social Security and Stimulus Payments

US federal transfers to individuals are large, countercyclical, vary geographically, and often credited with helping stabilize regional economies. This paper estimates the short-run effects of these using plausibly exogenous variation in temporary stimulus payments permanent Social Security benefit increases. States that received larger tended grow faster contemporaneously, a multiplier around 1.5 for 1/3 transfers. Results broadly consistent an open-economy New Keynesian model. At business cycle frequencies, cross-region transfer multipliers not suggesting only modest gains stabilization from automatic stabilizers. (JEL E12, E32, E62, H23, H55, R12)