Using VAR analysis on US data, we show that unanticipated fiscal expansions boost private consumption and business … crowding-in of both consumption and entry can be generated only under very specific assumptions. In a static model with full … such that future profits are high enough to generate entry. However, consumption falls for conventional parameter values …

the generality of this result w.r.t. size and persistence of the shock, size of the government spending multiplier, and … spending on economic recovery. -- deficit spending ; government spending multiplier ; economic recovery ; economic ; growth. …