Are optimism shocks an important source of business cycle fluctuations? Are deficit-financed tax cuts better than deficit-financed spending to increase output? These questions have been previously studied using SVARs identified with sign and zero restrictions and the answers have been positive...

Are optimism shocks an important source of business cycle fluctuations? Are decit-nanced tax cuts better than decit-nanced spending to increase output? These questions have been previously studied using SVARs identied with sign and zero restrictions and the answers have been positive and denite...