Using a large information approach and full Bayesian VAR techniques, we study the economic effects of fiscal policy shocks in the U.S. over the last five decades. We find that omitted variables can explain the well known sample instability of the estimates for the fiscal multiplier. We also find...

In this paper, we investigate the influence of fiscal policy uncertainty in the propagation of government spending shocks in the US economy. We propose a new index to measure fiscal policy uncertainty which relies on the dispersion of government spending forecasts as presented in the Survey of...