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Fiscal Policy, Wealth Effects, and Markups
Monacelli, Tommaso - 2009
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...
Persistent link: https://www.econbiz.de/10012765568
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Explaining the Effects of Government Spending Shocks on Consumption and the Real Exchange Rate
Ravn, Morten O. - 2007
government spending shock. In addition, the deep-habit model predicts that in response to an anticipated increase in government …
Persistent link: https://www.econbiz.de/10012776197
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An Empirical Characterization of the Dynamic Effects of Changes in Government Spending and Taxes on Output
Blanchard, Olivier J.; Perotti, Roberto - 2021
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...
Persistent link: https://www.econbiz.de/10013228233
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Consumption Smoothing Through Fiscal Policy in OECD and EU Countries
Arreaza, Adriana; Sørensen, Bent E.; Yosha, Oved - 2021
We measure the amount of smoothing achieved through various components of the government deficit in EU and OECD countries. For EU countries, at the 1-year frequency percent of shocks to GDP are smoothed via government consumption, 18 percent via transfers percent via subsidies, while taxes...
Persistent link: https://www.econbiz.de/10013225817
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Fiscal Shocks and Their Consequences
Burnside, A. Craig; Eichenbaum, Martin; Fisher, Jonas D. M. - 2021
models can account for the consequences of a fiscal policy shock. Simple versions of the neoclassical model can account for … the qualitative effects of a fiscal shock. Once we allow for habit formation and investment adjustment costs, the model … can also account reasonably well for the quantitative effects of a fiscal shock …
Persistent link: https://www.econbiz.de/10013240301
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Understanding the Effects of Government Spending on Consumption
Galí, Jordi; Lopez-Salido, David; Vallés, Javier - 2021
Recent evidence suggests that consumption rises in response to an increase in government spending. That finding cannot be easily reconciled with existing optimizing business cycle models. We extend the standard new Keynesian model to allow for the presence of rule-of-thumb consumers. We show how...
Persistent link: https://www.econbiz.de/10013246399
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When is Debt Odious? A Theory of Repression and Growth Traps
Acharya, Viral V.; Rajan, Raghuram G.; Shim, Jack - 2021
How is a developing country affected by its odious government’s ability to borrow in international markets? We examine the dynamics of a country’s growth, consumption, and sovereign debt, assuming that the government is myopic and wants to maximize short-term, socially unproductive,...
Persistent link: https://www.econbiz.de/10013315312
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The Output and Welfare Effects of Government Spending Shocks Over the Business Cycle
Sims, Eric R. - 2013
This paper studies the state-dependence of the output and welfare effects of shocks to government purchases in a canonical medium scale DSGE model. When monetary policy is characterized by a Taylor rule, the output multiplier (the change in output for a one unit change in government spending) is...
Persistent link: https://www.econbiz.de/10013071512
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Networks and the Macroeconomy : An Empirical Exploration
Acemoglu, Daron - 2015
the direct impact of a shock and the magnitudes of the downstream and the upstream indirect effects. We then investigate … through the input-output network, with a pattern broadly consistent with theory. Quantitatively, the network-based propagation …, capturing the fact that the local propagation of a shock to an industry will fall more heavily on other industries that tend to …
Persistent link: https://www.econbiz.de/10013019498
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Leads on Macroeconomic Risks to and from the Household Sector
Parker, Jonathan A. - 2013
This chapter describes a system, called the LEADS system, for providing market participants, regulators, and households with information on the reallocation of resources within, from, and to the household sector in response to macroeconomic events. The household sector is both a propagator of...
Persistent link: https://www.econbiz.de/10013089772