Understanding the Effects of a Shock to Government Purchases

This paper investigates the consequences of an exogenous increase in U.S. government purchases. We find that in response to such a shock, employment, output, and nonresidential investment rise, while real wages, residential investment and consumption expenditures fall. The paper argues that a simple variant of the neoclassical growth model which distinguishes between non-residential investment is consistent with this evidence. (Copyright: Elsevier)

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Year of publication:	1999
Authors:	Edelberg, Wendy ; Eichenbaum, Martin ; Fisher, Jonas D.M.
Published in:	Review of Economic Dynamics. - Society for Economic Dynamics - SED. - Vol. 2.1999, 1, p. 166-206
Publisher:	Society for Economic Dynamics - SED

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Extent:	application/pdf
Type of publication:	Article
Notes:	Published
Other identifiers:	10.1006/redy.1998.0036 [DOI]
Classification:	E1 - General Aggregative Models ; E6 - Macroeconomic Policy Formation, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005085602