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Query: faculty: "FEB" and publication year: "2011"

AuthorsR. Beetsma, M. Giuliodori
TitleThe effects of government purchases shocks: Review and estimates for the EU
JournalEconomic Journal
Volume121
Year2011
Issue550
PagesF4-F32
ISSN00130133
FacultyFaculty of Economics and Business
Institute/dept.FEB: Amsterdam School of Economics Research Institute (ASE-RI)
AbstractIn this article, we review the theoretical consequences of government purchases shocks for both closed and open economies, followed by a discussion of the empirical literature. Next, we provide our own estimates for the EU countries. We find that an increase in government purchases raises output, consumption and investment and reduces the trade balance. However, the stimulating effect is weaker and the trade balance reduction is larger for the more open EU economies, consistent with larger leakage effects. Further, we show that government purchases shocks in large EU economies have non-negligible consequences for economic activity in the main trading partners.
Document typeArticle
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