TY - JOUR
T1 - Understanding the Effects of a Shock to Government Purchases
AU - Edelberg, Wendy
AU - Eichenbaum, Martin
AU - Fisher, Jonas D.M.
N1 - Funding Information:
* The views expressed in this paper do not necessarily represent the views of the Federal Reserve Bank of Chicago or the Federal Reserve System. Martin Eichenbaum gratefully acknowledges the financial support of a grant from the National Science Foundation to the National Bureau of Economic Research.
PY - 1999/1
Y1 - 1999/1
N2 - 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 growth model which distinguishes between nonresidential and residential investment is consistent with this evidence.Journal of Economic LiteratureClassification Numbers: E1, E6.
AB - 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 growth model which distinguishes between nonresidential and residential investment is consistent with this evidence.Journal of Economic LiteratureClassification Numbers: E1, E6.
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U2 - 10.1006/redy.1998.0036
DO - 10.1006/redy.1998.0036
M3 - Article
AN - SCOPUS:0001045914
VL - 2
SP - 166
EP - 206
JO - Review of Economic Dynamics
JF - Review of Economic Dynamics
SN - 1094-2025
IS - 1
ER -