Data Still Show No Signs That Stimulus is Working

Stanford’s John Taylor slices the data in several nice simple graphs and shows:

Note that none of the action in real GDP growth is due to government purchases.

In other words during the entire first year of the stimulus package, the contribution of government purchases to change in real GDP growth is virtually nil. There is no evidence here that the stimulus has worked either to raise GDP growth or to create jobs.

The graphs really show the linkages, and the lack of them.