Engemann, Kristie M.; Owyang, Michael T.; Zubairy, Sarah - In: Review (2008) Mar, pp. 117-132
The empirical literature on the effects of government spending shocks lacks unanimity about the responses of consumption and wages. Proponents of shocks identified by structural vector auto-regressions (VARs) find results consistent with New Keynesian models: consumption and wages increase. On...