Demand-Side Stabilization Policies: What is the Evidence of Their Potential?, Issues 2000-2197
International Monetary Fund, Dec 1, 2000 - Dépenses publiques - Politique gouvernementale - Modèles économétriques - 30 pages
Using disaggregated data for the United States, this paper explores the effects of the variability of fiscal and monetary policy shocks. Higher variability of government spending shocks around a steady-state growth trend results, on average, in a decline in aggregate demand growth and inflation, with limited effects on output growth. on the other hand, higher variability of monetary shocks results, on average, in an increase in inflation and a decline in output growth. These results indicate the desirability of avoiding large fluctuations over time in either government spending or the money supply.
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aggregate demand shifts budget deﬁcit contractionary government spending contractionary monetary shocks contractionary shocks contrast cumulative effects cumulative negative cumulative response deﬂation demand contraction Demand-Side Asymmetry distributed lags distributed-lag effects of contractionary effects of expansionary effects of monetary empirical models energy price evidence expansionary and contractionary expansionary government spending face of contractionary face of expansionary face of monetary ﬁrms ﬁve Fixed Investment forecast four lags government spending shocks Gross Domestic Product growth of government higher variability Household Operation insigniﬁcant interest rate log value monetary and government money supply negative and statistically negative shocks negd negg negm denote expansionary nominal wage Personal Consumption Expenditures policy shocks posd posg positive and negative positive and statistically posm price level private investment private spending reduction in private response of output response of private Ricardian Equivalence Services and Structures shiﬁs shocks to government spending and monetary steady-state full-equilibrium supply curve supply side unanticipated variability of government