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Title:Trend growth and the dynamic effects of government spending PDF Logo
Authors:Tesfaselassie, Mewael F.
Issue Date:2011
Series/Report no.:Kiel Working Papers 1678
Abstract:The paper studies the macroeconomic effects of government spending shocks in an economy characterized by positive trend growth. It shows that the lower is the trend growth rate the less inflationary are government spending shocks and vice versa. Moreover, on impact output is higher but exhibits less persistence the lower is trend growth, an effect that also characterizes consumption and the government spending multiplier, given that consumption and labor are somewhat complementary.
Subjects:Trend growth
price and wage staggering
government spending multiplier
JEL:E21
E62
H31
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des IfW
Kieler Arbeitspapiere, IfW

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