Understanding the effects of a shock to government purchases

This paper investigates the consequences of an exogenous increase in U.S. government purchase. We find the 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 neoclassical growth model which distinguishes between nonresidential and residential investment is consistent with this evidence.

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Year of publication:	1998
Authors:	Edelberg, Wendy ; Eichenbaum, Martin ; Fisher, Jonas D.M.
Institutions:	Federal Reserve Bank of Chicago
Subject:	Expenditures \| Public

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Extent:	application/pdf
Series:	Working Paper Series.
Type of publication:	Book / Working Paper
Notes:	Number WP-98-7
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005726318