Understanding the Effects of a Shock to Government Purchases

Wendy Edelberg, Martin Eichenbaum and Jonas Fisher

No 6737, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper investigates the consequences of an exogenous increase in U.S. government purchases. We find that in response to such a shock, employment, output, and nonresidential investment rise, while real wages, residential investment, and consumption expenditures fall. The paper argues that a simple variant of the neoclassical model which distinguishes between nonresidential and residential investment is consistent with this evidence.

Date: 1998-09
New Economics Papers: this item is included in nep-dge, nep-pbe, nep-pol and nep-pub
Note: EFG
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Citations: View citations in EconPapers (23)

Published as Review of Economic Dynamics, Vol. 2, no. 1 (January 1999): 166-206

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Related works:
Journal Article: Understanding the Effects of a Shock to Government Purchases (1999)
Working Paper: Understanding the effects of a shock to government purchases (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:6737

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