An empirical characterization of the dynamic effects of changes in government spending and taxes on output

@inproceedings{Blanchard1999AnEC,
  title={An empirical characterization of the dynamic effects of changes in government spending and taxes on output},
  author={Olivier Blanchard and Roberto Perotti},
  year={1999}
}
This paper characterizes the dynamic effects of shocks in government spending and taxes on economic activity in the United States in the postwar period. It does so by using a structural VAR approach that relies on institutional information about the tax and transfer systems and the timing of tax collections to identify the automatic response of taxes and spending to activity, and, by implication, to infer fiscal shocks. One would have thought that such an exercise would have been carried out… CONTINUE READING
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