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Moura, Alban
(2015)
The effects of government spending endogeneity on estimated multipliers in the US.
TSE Working Paper, n. 15-610, Toulouse
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Abstract
This paper uses an estimated sticky-price model to identify endogenous movements in government consumption in the U.S. economy. Two feedback effects are considered, one originating from the stock of public debt and one from contemporaneous output. The data provide significant statistical evidence in favor of such mechanisms, even though a subsample analysis reveals that their strength may have decreased over time. Monte Carlo simulations assessing a DSGE model with exogenous spending and various identified VARs suggest that failing to account for these feedbacks may induce a severe upward bias in estimated multipliers.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | November 2015 |
| Place of Publication: | Toulouse |
| Uncontrolled Keywords: | Government spending multiplier, endogenous fiscal policy, structural econometrics |
| JEL Classification: | C32 - Time-Series Models E62 - Fiscal Policy; Public Expenditures, Investment, and Finance; Taxation H30 - General |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse 1 Capitole |
| Site: | UT1 |
| Date Deposited: | 30 Jun 2016 15:45 |
| Last Modified: | 02 Apr 2021 15:50 |
| OAI Identifier: | oai:tse-fr.eu:29919 |
| URI: | https://publications.ut-capitole.fr/id/eprint/18732 |
