Signals from the government: Policy disagreement and the transmission of fiscal shocks

• 成果类型: Article
• 署名作者: Ricco, Giovanni; Callegari, Giovanni; Cimadomo, Jacopo
• 署名单位: University of Warwick; European Central Bank
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2016.07.004
• 发表日期: 2016
• 页码: 107-118
• 关键词: Disagreement; Government spending shock; Fiscal transmission mechanism

摘要

We investigate the effects of fiscal policy communication on the propagation of government spending shocks. To this aim, we propose a new index measuring the coordination effects of policy communication on private agents' expectations. This index is based on the disagreement amongst US professional forecasters about future government spending. The underlying intuition is that a clear fiscal policy communication can coalesce expectations, reducing disagreement. Results indicate that, in times of low disagreement, the output response to fiscal spending innovations is positive and large, mainly due to private investment response. Conversely, periods of elevated disagreement are characterised by muted output response. (C) 2016 Elsevier B.V. All rights reserved.