Legislative and implementation lags imply that substantial time evolves between when news arrives about fiscal changes and when the changes actually take place -- time when households and firms can adjust their behavior. We identify two types of fiscal news -- government spending using the...

In 1995 Mexico experienced its largest contraction of GDP since the early 20th century. I propose a simple mechanism to partially account for the collapse of economic activity: distortions on consumption and leisure caused by fiscal policy. The contraction of GDP was preceded by a financial...

This paper looks at the relationship between government budget deficits and the growth rate of GDP. While orthodox economic theory offers several reasons to believe that growing deficits might be associated with slower growth, and would ultimately be unsustainable, Keynesians assert that...

In this article we present an endogenous growth model with productive public investment in infrastructure capital. Further, we suppose that the government pays lump-sum transfers to the household and subsidizes private investment. First, we demonstrate that there exists a unique balanced growth...

This paper studies the macroeconomic effects of seven key TCJA provisions, including the tax cuts for individuals and businesses, the bonus depreciation of equipment, the amortization of R&D expenses, and the limits on interest deductibility. I use a dynamic general equilibrium model with...

We present a quantitative characterisation of the fluctuations of the annualized growth rate of the real US GDP per capita growth at many scales, using a wavelet transform analysis of two data sets, quarterly data from 1947 to 2015 and annual data from 1800 to 2010. Our main finding is that the...

In this paper we assess the hypothesis that the unprecedented stability of the United States economy, in the decades preceding the outbreak of the financial crisis in August 2007, caused a relatively low output volatility in other national economies. The results of the time series analysis of 97...