Putting Government spending shocks under the microscope standard vector autoregression versus the narrative approach Rong Li
By: Li, Rong
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Material type: 
ArticlePublisher: 2017Subject(s): GASTO PUBLICO | GOBIERNO | MODELOS ECONOMETRICOS | ANÁLISIS DE REGRESIÓN
In:
FinanzArchiv v. 73, n. 3, September 2017, p. 237-254Summary: Standard vector autoregression and the narrative approach yield contrasting responses ofconsumption and real wages to a government spending shock. A key difference in the approaches is the composition of identified shocks. Standard VAR features a large increasein government purchase of intermediate goods and services and investment, but a small response of government employment compensation. By contrast, the narrative approach identifies a smaller increase in intermediate goods and services purchase but a large increase in employment compensation. Furthermore, empirical evidence indicates impacts of fiscal stimulusvary considerably for different types of spending from the American Recovery and Reinvestment Act.
| Item type | Current location | Home library | Call number | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
| IEF | OP 207/2017/3-1 (Browse shelf) | Available | OP 207/2017/3-1 |
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Standard vector autoregression and the narrative approach yield contrasting responses ofconsumption and real wages to a government spending shock. A key difference in the approaches is the composition of identified shocks. Standard VAR features a large increasein government purchase of intermediate goods and services and investment, but a small response of government employment compensation. By contrast, the narrative approach identifies a smaller increase in intermediate goods and services purchase but a large increase in employment compensation. Furthermore, empirical evidence indicates impacts of fiscal stimulusvary considerably for different types of spending from the American Recovery and Reinvestment Act.
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