Announcing a large fiscal stimulus may signal the government’s pessimism about the severity of a recession to the private sector, impairing the stabilizing effects of the policy. Using a theoretical model, we show that these signaling effects occur when the stimulus exceeds expectations and...

Fiscal foresight has recently received much attention in the literature. In this context, this study examines whether stock returns of the construction industry can forecast public investment in Japan. In the forecasting exercise, the VAR model with mixed-frequency data sampling regression is...