An Empirical Investigation of US Fiscal Expenditures and Macroeconomic Outcomes

13 Pages Posted: 26 May 2017

See all articles by Yunus Aksoy

Yunus Aksoy

Birkbeck University of London

Giovanni Melina

International Monetary Fund (IMF)

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

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

Yunus Aksoy (Contact Author)

Birkbeck University of London ( email )

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Giovanni Melina

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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