This paper considers budget expansions and adjustments in OECD countries in the last three decades. Our main results are: i) on average fiscal expansions are the results of increases in expenditures, particularly of transfer programs, while contractions are typically due to tax increases; ii)...

This paper characterizes the dynamic effects of shocks in government spending and taxes on economic activity in the United States in the post-war period. It does so by using a mixed structural VAR/event study approach. Identification is achieved by using institutional information about the tax...

We estimate the effects of fiscal policy on the labor market in US data. An increase in government spending of 1 percent of GDP generates output and unemployment multipliers respectively of about 1.2 per cent (at one year) and 0.6 percentage points (at the peak). Each percentage point increase...

We document that variations in government purchases generate a rise in consumption, the real and the product wage, and a fall in the markup. This evidence is robust across alternative empirical methodologies used to identify innovations in government spending (structural VAR vs. narrative...

Government spending at the zero lower bound (ZLB) is not necessarily welfare enhancing, even when its output multiplier is large. We illustrate this point in the context of a standard New Keynesian model. In that model, when government spending provides direct utility to the household, its...

Impulse responses to government spending shocks in Standard Vector Autoregressions (SVARs) typically display "expansionary" features. However, SVARs can be subject to a "non-fundamentalness" problem. "Expectations - Augmented" VARs (EVARs), which use direct measures of forecasts of defense...

This paper evaluates the effects of fiscal policy on investment using a panel of OECD countries. In particular, we investigate how different types of fiscal policy affect profits and , as a result, investment. We find a sizable negative effect of public spending -- and in particular of its...

Large population / rapidly growing economies such as China and India have argued that in the upcoming UNFCCC negotiations in Copenhagen, any emission reduction targets they take on should be based on their intensity of emissions (emissions/$GDP) on a target date not the level of emissions. They...

In the paper we discuss China's participation in both the 2009 Copenhagen negotiations on a post-Kyoto global climate change regime currently under way and out beyond Copenhagen in further negotiations likely to follow. China is now both the largest and most rapidly growing carbon emitter, and...

We discuss emerging proposals for border tax adjustments (BTAs) to accompany commitments to reduce carbon emissions in the EU, the US and other OECD economies. The rationale offered for such border adjustment is that various entities, such as the EU, if making commitments to reduce emissions...