Please use this identifier to cite or link to this item: http://buratest.brunel.ac.uk/handle/2438/7091
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dc.contributor.authorYang, W-
dc.contributor.authorFidrmuc, J-
dc.contributor.authorGhosh, S-
dc.date.accessioned2013-01-07T11:45:08Z-
dc.date.available2013-01-07T11:45:08Z-
dc.date.issued2012-
dc.identifier.citationEconomics and Finance Working Paper, Brunel University, 12-24, Nov 2012en_US
dc.identifier.urihttp://bura.brunel.ac.uk/handle/2438/7091-
dc.description.abstractThe literature on estimating macroeconomic effects of fiscal policy requires suitable instruments to identify exogenous and unanticipated spending shocks. So far, the instrument of choice has been military build-ups. This instrument, however, largely limits the analysis to the US as few other countries have been involved in mainly extraterritorial conflicts. Moreover, the expenditure associated with military build-ups affects primarily the defense sector so that the resulting multiplier does not necessarily approximate the effects of changes to general government spending. We propose an alternative instrument: government relief expenditure in the wake of natural disasters which is more similar in its scope to general government spending. We construct a rich data set of natural disasters and the corresponding government responses at the US state level. We apply this methodology both at the state as well as national levels and show that natural disasters serve as a powerful instrument for identifying government spending shocks. Furthermore, we show that the multiplier pertaining to non-defense government spending is higher than the defense-spending multiplier estimated in the literature using military build-ups.en_US
dc.language.isoenen_US
dc.publisherBrunel Universityen_US
dc.subjectFiscal shocksen_US
dc.subjectNarrative approachen_US
dc.subjectFiscal multiplieren_US
dc.subjectNatural disasteren_US
dc.titleGovernment spending shocks and the multiplier: New evidence from the U.S. based on natural disastersen_US
dc.typeArticleen_US
pubs.organisational-data/Brunel-
pubs.organisational-data/Brunel/Brunel Active Staff-
pubs.organisational-data/Brunel/Brunel Active Staff/School of Social Sciences-
pubs.organisational-data/Brunel/Brunel Active Staff/School of Social Sciences/Economics and Finance-
pubs.organisational-data/Brunel/University Research Centres and Groups-
pubs.organisational-data/Brunel/University Research Centres and Groups/School of Social Sciences - URCs and Groups-
pubs.organisational-data/Brunel/University Research Centres and Groups/School of Social Sciences - URCs and Groups/Centre for Economic Development and Institutions-
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Dept of Economics and Finance Research Papers

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