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

• 成果类型: Article
• 署名作者: Sims, Eric; Wolff, Jonathan
• 署名单位: University of Notre Dame; National Bureau of Economic Research; University System of Ohio; Miami University
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12308
• 发表日期: 2018
• 页码: 1403-1435
• 关键词: fiscal-policy; monetary-policy; infrastructure investment; multiplier; consumption; purchases; stimulus; rise

摘要

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.