1980. Over the period 1955-1979 an expansionary spending or revenue shock was associated with modestly higher stock prices …. After 1980, along with a decline in the fiscal multiplier, the response of stock prices to the same shock became negative …

shocks changed in 1980. Over the period 1955-1979, an expansionary spending or revenue shock was associated with higher stock … prices. After 1980, the response of stock prices to the same shock became negative. Using a dynamic stochastic general … the fiscal shock. In contrast, endogenous growth mechanisms appear to be weaker in the post-1980 period with positive …