Policy Effects in the Post Boom U.S. Economy

Ray Fair ()

No 1497, Cowles Foundation Discussion Papers from Cowles Foundation, Yale University

Abstract: The paper analyzes the question why the U.S. economy in the 2000:4-2004:3 period was sluggish in light of the large expansionary fiscal and monetary policies that took place. The answer does not appear to be that there were large structural changes in the economy or systematic bad shocks. This paper tests for such changes and shocks, and the results are generally negative. Instead, the main culprits seem to be large negative effects from declines in the stock market and exports. Although not tested in this paper, some of the decline in exports may be the result of the stock market decline, in which case most of the explanation is simply the stock market decline itself.

Keywords: Fiscal policy; Monetary policy (search for similar items in EconPapers)
JEL-codes: E00 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac
Date: 2005-01
Note: CFP 1193
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Published in Topics in Macroeconomics (2005), 5(1): Article 19

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Persistent link: http://EconPapers.repec.org/RePEc:cwl:cwldpp:1497

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