The Effect of Fiscal Policy Shocks on the Flow of Funds

Andrew Bossie

2013 Papers from Job Market Papers

Abstract: Abstract: This paper uses a selection of fiscal vector autoregression models to identify the effect of fiscal policy shocks on the private sectorâs balance sheet using the Flow of Funds. As well, I examine the response of treasury interest rates, the Federal Funds rate and the assets of the Federal Reserve to gauge the response of monetary policy to fiscal policy shocks. I find that the Federal Reserve does not respond to fiscal policy shocks in any significant way. I also find that the business sector responds to fiscal policy shocks but not very strongly. The household sector responds more clearly. Fiscal policy shocks have an effect on householdâs holdings of both short term liquid assets and long term illiquid assets. Spending shocks also have a clear effect on mortgage lending.

JEL-codes: E4 E5 E6 H3 H5 (search for similar items in EconPapers)
Date: 2013-11-15
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ideas.repec.org/jmp/2013/pbo741AndrewBossi ... cyandFlowofFunds.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jmp:jm2013:pbo741

Access Statistics for this paper

More papers in 2013 Papers from Job Market Papers
Bibliographic data for series maintained by RePEc Team ().