Berndt, Antje; Lustig, Hanno; Yeltekin, Sevin - Carnegie Mellon University, Tepper School of Business
We develop a method for identifying and quantifying the fiscal channels that help finance government spending shocks … the U.S. government’s unantic- ipated spending needs were financed by a reduction in the market value of debt and more …. We define fiscal shocks as surprises in defense spending and show that they are more precisely identified when defense …