Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/154397
Authors: 
Callegari, Giovanni
Cimadomo, Jacopo
Ricco, Giovanni
Year of Publication: 
2016
Series/Report no.: 
ECB Working Paper 1964
Abstract: 
We investigate the effects of fiscal policy communication on the propagation of government spending shocks. To this aim, we propose a new index measuring the coordination effects of policy communication on private agents' expectations. This index is based on the disagreement amongst US professional forecasters about future government spending. The underlying intuition is that a clear fiscal policy communication can coalesce expectations, reducing disagreement. Results indicate that, in times of low disagreement, the output response to fiscal spending innovations is positive and large, mainly due to private investment response. Conversely, periods of elevated disagreement are characterised by muted output response.
Subjects: 
disagreement
fiscal transmission mechanism
government spending shock
JEL: 
E60
D80
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-2212-8
Document Type: 
Working Paper

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