Multipliers of unexpected increases in military spending : an empirical investigation
Ben Zeev, Nadav (Ben-Gurion University of the Negev)
Pappa, Evi (Universitat Autònoma de Barcelona)

Additional title:	Multipliers of unexpected increases in defense spending : an empirical investigation
Date:	2015
Abstract:	We show that unexpected increases in defense and total government spending increase total factor productivity (TFP) and output and decrease investment in US quarterly data. Yet, the output multiplier is zero when the TFP response is shut down. We examine various explanations for this phenomenon and _nd that the rise in TFP is due to the presence of measurement error in quarterly data. Anticipated increases in military spending are not a_ected by the presence of measurement error and induce sizeable multipliers.
Grants:	Ministerio de Economía y Competitividad ECO2012-32392 Agència de Gestió d'Ajuts Universitaris i de Recerca 2009/SGR-00350
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Language:	Anglès
Document:	Article ; recerca ; Versió sotmesa a revisió
Subject:	Defense spending ; Unanticipated defense shocks ; Total factor productivity
Published in:	Journal of economic dynamics & control, Vol. 57 (2015) , p. 205-226, ISSN 0165-1889

DOI: 10.1016/j.jedc.2015.06.004

Preprint 43 p, 1.1 MB

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