An Empirical Characterization of the Dynamic Effects of changes in Government Spending and Taxes on Output-英文文献.pdf

AN EMPIRICAL CHARACTERIZATION OF THE DYNAMIC EFFECTS OF CHANGES IN GOVERNMENT SPENDING AND TAXES ON OUTPUT* OLIVIER BLANCHARD AND ROBERTO PEROTTI This paper characterizes the dynamic effects of shocks in government spend- ing and taxes on U. S. activity in the postwar period . It does so by using a mixed structural VAR/event study approach. Identication is achieved by using institu- tional information about the tax and transfer systems to identify the automatic response of taxes and spending to activity, and, by implication, to infer scal shocks. The results consistently show positive government spending shocks as having a positive effect on output, and positive tax shocks as having a negative effect . One result has a distinctly nonstandard avor: both increases in taxes and increases in government spending have a strong negative effect on investment spending. I. INTRODUCTION The predominant, Keynesian , view of the effects of scal policy that was embedded in the large-scale macroeconometric models of the seventies and eighties has come under attack. Theoretically, in the neoclassical approach that has developed in the last twenty years , government spending can have drastically different effects than in Keynesian models, particularly on pri- vate consumption . Empirically, the response of the economy to several episodes of scal retrenchment in the last fteen years has been at odds with conventional Keynesian wisdom : on several occasions, private consumption and GDP increased signicantly while government spending was severely cut. Finally, the evi- dence from large-scale econometric models has been largely dis- miss