Big G
Lydia Cox, Gernot J. Müller, Ernesto Pasten, Raphael Schoenle, and Michael Weber
"Big G" typically refers to aggregate government spending on a homogeneous good. In this paper, we open up this construct by analyzing the entire universe of procurement contracts of the US government and establish five facts. First, government spending is granular; that is, it is concentrated in relatively few firms and sectors. Second, relative to private expenditures its composition is biased. Third, procurement contracts are short-lived. Fourth, idiosyncratic variation dominates the fluctuation in spending. Last, government spending is concentrated in sectors with relatively sticky prices. Accounting for these facts within a stylized New Keynesian model offers new insights into the fiscal transmission mechanism: fiscal shocks hardly impact inflation, little crowding out of private expenditure exists, and the multiplier tends to be larger compared to a one-sector benchmark, aligning the model with the empirical evidence.
Year of publication: |
2020
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Authors: | Cox, Lydia ; Müller, Gernot J. ; Pasten, Ernesto ; Schoenle, Raphael ; Weber, Michael |
Publisher: |
[Cleveland, OH] : Federal Reserve Bank of Cleveland |
Subject: | government spending | federal procurement | granularity | sectoral heterogeneity | fiscal policy transmission | monetary policy | Finanzpolitik | Fiscal policy | Öffentlicher Auftrag | Public contract | Neoklassische Synthese | Neoclassical synthesis | Öffentliche Ausgaben | Public expenditure | Multiplikator | Multiplier | Preisrigidität | Price stickiness | Branche | Economic sector | Verdrängungseffekt | Crowding out | Inflation | Geldpolitik | Monetary policy | Geldpolitische Transmission | Monetary transmission |
Saved in:
freely available
Extent: | 1 Online-Ressource (circa 92 Seiten) Illustrationen |
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Series: | Federal Reserve Bank of Cleveland working paper series. - Cleveland, Ohio : [Verlag nicht ermittelbar], ISSN 2573-7953, ZDB-ID 2185007-0. - Vol. 20, 15 (May 2020) |
Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Graue Literatur ; Non-commercial literature ; Arbeitspapier ; Working Paper |
Language: | English |
Other identifiers: | 10.26509/frbc-wp-202015 [DOI] |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10012388109