Demand-Side Stabilization Policies: What is the Evidence of their Potential?
Electronic Access:
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Summary:
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.
Series:
Working Paper No. 2000/197
Subject:
Expenditure Monetary base Money National accounts Private consumption Private investment Production Production growth
English
Publication Date:
December 1, 2000
ISBN/ISSN:
9781451860009/1018-5941
Stock No:
WPIEA1972000
Pages:
31
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