Monacelli, Tommaso; Perotti, Roberto - In: Journal of the European Economic Association 6 (2008) 2-3, pp. 395-403
Based on structural VAR evidence for the U.S., we document that a rise in government spending generates three facts: (1) an appreciation of the terms of trade; (2) a fall in the price of traded vs. non-traded goods (proxied by the price of goods relative to services), and (3) a positive co-movement...
