Details

Autor(en) / Beteiligte

• Fisher, Jonas D.M.
• Peters, Ryan

Titel

Using Stock Returns to Identify Government Spending Shocks

Ist Teil von

• The Economic journal (London), 2010-05, Vol.120 (544), p.414-436

Ort / Verlag

Oxford, UK: Blackwell Publishing Ltd

Erscheinungsjahr

2010

Quelle

EBSCOhost Business Source Ultimate

Beschreibungen/Notizen

• This article explores a new approach to identifying government spending shocks which avoids many of the shortcomings of existing approaches. The new approach is to identify government spending shocks with statistical innovations to the accumulated excess returns of large US military contractors. This strategy is used to estimate the dynamic responses of output, hours, consumption and real wages to a government spending shock. We find that positive government spending shocks are associated with increases in output, hours and consumption. Real wages initially decline after a government spending shock and then rise after a year. We estimate the government spending multiplier associated with increases in military spending to be about 1.5 over a horizon of 5 years.