We investigate whether the macroeconomic effects of government spending shocks vary with the level of uncertainty. Using postwar US data and a Self-Exciting Interacted VAR (SEIVAR) model, we find that fiscal spending has positive output effects in tranquil times but is contractionary during...

We investigate whether US government spending multipliers are higher during periods of heightened uncertainty or economic slack as opposed to normal times. Using quarterly historical data and local projections, we estimate a cumulative one-year multiplier of 2 during uncertain periods. In...