Journal of Monetary Economics 2020 DOI: 10.1016/j.jmoneco.2019.05.003 View full text
Christoph E. Boehm

Abstract: I show that a large and conventional class of macroeconomic models predicts that short-lived government investment shocks have a smaller fiscal multiplier than government consumption shocks. I test this prediction in a panel of OECD countries using real-time forecasts of government consumption and investment to purify changes in purchases of their predicted components. Consistent with theory, I estimate a government investment multiplier near zero and a government consumption multiplier of approximately 0.8. T…

expand abstract