An empirical investigation of US fiscal expenditures and macroeconomic outcomes

Aksoy, Y. & Melina, G. (2012). An empirical investigation of US fiscal expenditures and macroeconomic outcomes. Economics Letters, 114(1), pp. 64-68. doi: 10.1016/j.econlet.2011.09.017

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Abstract

In addition to containing stable information to explain inflation, state-local expenditures have also 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, present also a larger share of the forecast error variance of US real output than the Federal funds rate.

Item Type: Article
Additional Information: NOTICE: this is the author’s version of a work that was accepted for publication in Economics Letters. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Economics Letters, Volume 114, Issue 1, Pages 64–68, http://dx.doi.org/10.1016/j.econlet.2011.09.017.
Uncontrolled Keywords: Information value, state-local expenditures, forecast error variance decomposition
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HG Finance
Divisions: School of Social Sciences > Department of Economics
URI: http://openaccess.city.ac.uk/id/eprint/3776

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