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Signals from the government : policy disagreement and the transmission of fiscal shocks
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Ricco, Giovanni, Callegari, Giovanni and Cimadomo, Jacopo (2016) Signals from the government : policy disagreement and the transmission of fiscal shocks. Journal of Monetary Economics, 82 . pp. 107-118. doi:10.1016/j.jmoneco.2016.07.004 ISSN 0304-3932.
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Official URL: http://dx.doi.org/10.1016/j.jmoneco.2016.07.004
Abstract
We investigate the effects of fiscal policy communication on the propagation of government spending shocks. To this aim, we propose a new index measuring the coordination effects of policy communication on private agents׳ expectations. This index is based on the disagreement amongst US professional forecasters about future government spending. The underlying intuition is that a clear fiscal policy communication can coalesce expectations, reducing disagreement. Results indicate that, in times of low disagreement, the output response to fiscal spending innovations is positive and large, mainly due to private investment response. Conversely, periods of elevated disagreement are characterised by muted output response.
Item Type: | Journal Article | ||||||||||
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Subjects: | H Social Sciences > HJ Public Finance | ||||||||||
Divisions: | Faculty of Social Sciences > Economics | ||||||||||
Library of Congress Subject Headings (LCSH): | Fiscal policy -- United States, Government spending policy -- United States | ||||||||||
Journal or Publication Title: | Journal of Monetary Economics | ||||||||||
Publisher: | Elsevier BV | ||||||||||
ISSN: | 0304-3932 | ||||||||||
Official Date: | September 2016 | ||||||||||
Dates: |
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Volume: | 82 | ||||||||||
Page Range: | pp. 107-118 | ||||||||||
DOI: | 10.1016/j.jmoneco.2016.07.004 | ||||||||||
Status: | Peer Reviewed | ||||||||||
Publication Status: | Published | ||||||||||
Access rights to Published version: | Restricted or Subscription Access | ||||||||||
Date of first compliant deposit: | 21 February 2018 | ||||||||||
Date of first compliant Open Access: | 16 July 2018 | ||||||||||
Related URLs: | |||||||||||
Open Access Version: |
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