EconPapers    
Economics at your fingertips  
 

THE OUTPUT AND WELFARE EFFECTS OF GOVERNMENT SPENDING SHOCKS OVER THE BUSINESS CYCLE

Eric Sims and Jonathan Wolff ()

International Economic Review, 2018, vol. 59, issue 3, 1403-1435

Abstract: This article studies the output and welfare effects of shocks to government spending in a medium‐scale DSGE model. Our model considers both government consumption and investment and allows for a variety of fiscal financing mechanisms. We use the model to address several questions pertaining to the magnitude and state dependence of both the output and welfare effects of changes in government spending. Countercyclical government spending is undesirable as a general policy prescription, but we highlight situations (such as when monetary policy is passive or when government investment is particularly productive) in which it might be beneficial.

Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1111/iere.12308

Related works:
Working Paper: The Output and Welfare Effects of Government Spending Shocks over the Business Cycle (2013) Downloads
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:wly:iecrev:v:59:y:2018:i:3:p:1403-1435

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0020-6598

Access Statistics for this article

International Economic Review is currently edited by Harold L. Cole

More articles in International Economic Review from Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association 160 McNeil Building, 3718 Locust Walk, Philadelphia, PA 19104-6297. Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2019-05-09
Handle: RePEc:wly:iecrev:v:59:y:2018:i:3:p:1403-1435