hours worked and of real wages to a fiscal policy shock. Our key finding is that the model cannot do so unless we make the …. But it cannot account for the temporal pattern of how these variables respond to a fiscal policy shock and generates a …

This paper investigates the response of real wages and hours worked to an exogenous shock in fiscal policy. We identify … this shock with the dynamic response of government purchases and tax rates to an exogenous increase in military purchases …

across the G3 countries in their estimated dynamic responses to a fiscal shock. At first, and for several years thereafter …, the real exchange rate appreciates in response to an expansionary fiscal shock. However, eventually, the process is … reversed; the real exchange rate overshoots and actually depreciates relative to its initial prevailing before the fiscal shock …

Our current inflation stemmed from a fiscal shock. The Fed is slow to react. Why? Will the Fed's slow reaction spur … high real interest rates. Price stickiness means inflation will persist past an initial shock. To reduce inflation, fiscal …

first oil shock (1973), but accelerated again afterward, reaching levels above 100 percent on average between 1980 and 1994 …