The dynamic effect of public expenditure shocks in the United States

Susana Parraga Rodriguez

No 1628, Working Papers from Banco de España

Abstract: This paper estimates the dynamic aggregate effect of exogenous shocks to two key components of public expenditure in the United States: government income transfers and government spending. The identifi cation strategy positions the structural shocks to public expenditures in an SVAR framework with exogenous measures of public expenditure changes. Transfers shocks are based on a new narrative variable of legislated increases in U.S. social security benefi ts. I demonstrate that shocks to different types of public expenditure do not have the same macroeconomic impact. The estimated government spending multiplier is between 0 and 1, while increases in transfers generate a multiplier effect above 1.

Keywords: government expenditures; transfer payments; social security (search for similar items in EconPapers)
JEL-codes: E2 E62 H55 H56 I38 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2016-12
New Economics Papers: this item is included in nep-mac and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: The dynamic effects of public expenditure shocks in the United States (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:1628

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