Valerie Ramey talks with host Russ Roberts about the effect of government spending on output and employment. Ramey's work exploits the exogenous nature of wartime spending. She finds a multiplier between .8 and 1.2. She also discusses a survey looking at estimates by others and discusses the effects of taxes. The conversation concludes with a discussion of the imprecision of multiplier estimates and the contributions of recent Nobel Laureates Sargent and Sims.