Great Spending Crashes

Beckworth David () and Joshua Hendrickson
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Beckworth David: Western Kentucky University

The B.E. Journal of Macroeconomics, 2012, vol. 12, issue 1, 28

Abstract: Over the last century, there have been four major peacetime crashes in aggregate nominal spending in the United States. We argue in this paper that these great spending crashes can be best understood from a monetary disequilibrium perspective. We examine this hypothesis using a structural vector autoregression that identifies the key monetary shocks implied by the monetary disequilibrium view. We find that these monetary shocks are the main contributors to each of the great spending crashes.

Keywords: nominal spending; aggregate spending; monetary disequilibrium; monetary shocks; vector autoregression; nominal GDP targeting (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1515/1935-1690.2380

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