Fiscal shocks and their consequences

• 成果类型: Article
• 署名作者: Burnside, C; Eichenbaum, M; Fisher, JDM
• 署名单位: Northwestern University; University of Virginia; Federal Reserve System - USA; Federal Reserve Bank - Chicago
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/S0022-0531(03)00252-7
• 发表日期: 2004
• 页码: 89-117
• 关键词: Fiscal policy; business cycles; growth model; habit formation; investment adjustment costs

摘要

This paper investigates the response of hours worked and real wages to fiscal policy shocks in the post-World-War 11 US. We identify these shocks with exogenous changes in military purchases and argue that they lead to a persistent increase in government purchases and tax rates on capital and labor income, and a persistent rise in aggregate hours worked as well as declines in real wages. The shocks are also associated with short lived rises in aggregate investment and small movements in private consumption. We describe and implement a methodology for assessing whether standard neoclassical models can account for the consequences of a fiscal policy shock. Simple versions of the neoclassical model can account for the qualitative effects of a fiscal shock. Once we allow for habit formation and investment adjustment costs, the model can also account reasonably well for the quantitative effects of a fiscal shock. (C) 2003 Elsevier Inc. All rights reserved.