The inflation response to government spending shocks A fiscal price
PDF The Ination Response to Government Spending Shocks A Fiscal Price Puzzle
The effects of fiscal spending shocks are estimated by the introduction of a measure of fiscal policy into the neoclassical growth model via a parametric function that distorts the value of newly
The effects of fiscal spending shocks are estimated by the introduction of a measure of fiscal policy into the neoclassical growth model via a parametric function that distorts the value of newly crea 2005 Fiscal Spending Shocks and the Price of Investment Evidence from a Panel of Countries Working Papers 200502 Middle Tennessee State
Its Never Different Fiscal Policy Shocks and Inflation
The empirical evidence suggests that government spending shocks i have in general a small but positive effect on GDP ii have a varied effect on private consumption and on private investment iii have a positive effect on housing prices iv lead to a quick fall in stock prices and v in general impact positively on the price level
Asymmetry in the effects of us government spending shocks evidence and
increases in government spending and there is some evidence for positive effects on investment though this seems less robust1 This seems hard Studies of fiscal spending shocks in stickyprice models which are arguably more relevant for shortterm analysis have so far been limited to models of lumpsum taxation Canzoneri et al 2002
Fiscal Spending Shocks And The Price Of Investment Evidence
fiscal shock At the same time it emerges that fiscal shocks characterized by expectations of further increases of public spending are associated with a reduction in economic activity especially in the shortrun and with a more persistent increase in public debt The latter tends to remain above its initial level over the whole considered
Fiscal Spending Shocks and the Price of Investment Evidence from a
Table 1 lists some of the existing evidence on the price response to government spending shocks that has been reported in the literature Consistent with our findings most studies have reported that the response of prices to expansionary fiscal shocks is either negative eg Fatas and Mihov 2001b or Mountford and Uhlig 2009 or insignificant eg Nakamura and Steinsson 2014 contrary
The papers evidence of a negative fiscal multiplier in the face of expansionary government spending shocks represents the average timeseries response for fluctuations around a steadystate trend in the sample period under investigation The evidence is robust upon accounting for private consumption and investment shocks in the empirical
The existing evidence on the response of prices to government spending shocks is rather mixed as illustrated inTable 1 Some previous studies includingFatas and Mihov 2001b andMountford and Uhlig 2009 have also reported a decline in prices in response to a scal expansion in the US However other authorsŠ for exampleEdelberg et al
This paper investigates the impact of expansionary fiscal shocks on inflation using a large panel of 140 countries over the period 19702022 We find evidence that expansionary shifts in the fiscal policy stance have inflationary consequences in the short run and over the medium term The strength and persistence of inflation response however are not uniform across different types of
Fiscal Spending Shocks And The Price Of Investment Evidence
The composition of public spending and the inflationary effects of
The macroeconomic effects of fiscal policy Taylor Francis Online
Fiscal Spending Shocks and the Price of Investment Evidence
Distortionary Taxation Debt and the Transmission of Fiscal Policy Shocks
PDF Identifying the effects of government spending shocks with and without
However other studies find that an exogenous increase in government spending induces inflationary pressure Caldara and Kamps 2008 Ben Zeev and Pappa 2017 Ferrara et al 2021 making the transmission of fiscal spending shocks to prices a still unsettled issue In contrast to the existing literature our findings point out that the