. Specifically, we use sign restrictions to identify a government revenue shock as well as a government spending shock, while … controlling for a generic business cycle shock and a monetary policy shock. We explicitly allow for the possibility of … announcement effects, i.e., that a current fiscal policy shock changes fiscal policy variables in the future, but not at present …

of the RR shock has much smaller effects on GDP than in RR, typically about - .5 percentage points of GDP. I argue that … difference, exhibit impulse responses that are biased towards 0. I show that the correct impulse responses to a RR tax shock are …