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Fève, Patrick
and Pietrunti, Mario
(2016)
Noisy Fiscal Policy.
TSE Working Paper, n. 16-634, Toulouse
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Abstract
This paper investigates the macroeconomic effects of fiscal policy in a setting in which private agents receive noisy signals about future shocks to government expenditures. We show how to empirically identify the relative weight of news and noise shocks to government spending and compute the level of noise for Canada, the UK and the US.We then investigate the quantitative implications of imperfect fiscal policy information using a medium-scale DSGE model. We find that when the government seeks to implement a persistent change in expected public spending, the existence of noise (as estimated using actual data) implies a sizable difference in fiscal multipliers compared to the perfect fiscal foresight case.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | March 2016 |
| Place of Publication: | Toulouse |
| Uncontrolled Keywords: | Government spending, Noisy Information, DSGE Models |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse 1 Capitole |
| Site: | UT1 |
| Date Deposited: | 19 Apr 2016 14:15 |
| Last Modified: | 02 Apr 2021 15:51 |
| OAI Identifier: | oai:tse-fr.eu:30372 |
| URI: | https://publications.ut-capitole.fr/id/eprint/20238 |
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