An Empirical Investigation of US Fiscal Expenditures and Macroeconomic Outcomes
13 Pages Posted: 26 May 2017
Date Written: 2012
Abstract
In addition to containing stable information to explain inflation, state-local expenditures also have a larger share of the forecast error variance of US inflation than the federal funds rate. Non-defense federal expenditures are useful in predicting real output variations and, starting from the early 1980s, also present a larger share of the forecast error variance of US real output than the federal funds rate.
Keywords: Information value, State-local expenditures, Forecast error variance decomposition
JEL Classification: E31, E62
Suggested Citation: Suggested Citation
Aksoy, Yunus and Melina, Giovanni, An Empirical Investigation of US Fiscal Expenditures and Macroeconomic Outcomes (2012). Economics Letters, Vol. 114, 2012, Available at SSRN: https://ssrn.com/abstract=2973862
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