IDEAS home Printed from https://ideas.repec.org/p/liv/livedp/202201.html
   My bibliography  Save this paper

Macroeconomic Effects of Government Spending Shocks: New Narrative Evidence from Canada

Author

Listed:
  • Syed Hussain
  • Lin Liu

Abstract

This paper examines the macroeconomic effects of government spending shocks in Canada for the period of 1949 - 2012. We construct a novel measure of news about exogenous government spending changes identified through the narrative approach. We use government documents, mostly the budget speech, to identify the size, timing, and principal motivation for all planned major federal government spending changes. To achieve identification, we consider those changes that are unrelated to the contemporaneous movements in the economy. The implied government spending multiplier estimates using our exogenous government spending news series are between 0.84 and 1.55.

Suggested Citation

  • Syed Hussain & Lin Liu, 2022. "Macroeconomic Effects of Government Spending Shocks: New Narrative Evidence from Canada," Working Papers 202201, University of Liverpool, Department of Economics.
    • Handle: RePEc:liv:livedp:202201
    as

    Download full text from publisher

    File URL: https://www.liverpool.ac.uk/media/livacuk/schoolofmanagement/research/economics/Macroeconomic,Effects,of,Government,Spending,Shocks.pdf
    File Function: First version, 2022
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Government Spending Shocks; Government Spending Multiplier; Narrative Accounts; Canada;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:liv:livedp:202201. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Rachel Slater (email available below). General contact details of provider: https://edirc.repec.org/data/mslivuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.