NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Government Investment and Fiscal Stimulus in the Short and Long Runs

Eric M. Leeper, Todd B. Walker, Shu-Chun Susan Yang

NBER Working Paper No. 15153
Issued in July 2009
NBER Program(s):   EFG

This paper contributes to the debate about fiscal multipliers by studying the impacts of government investment in conventional neoclassical growth models. The analysis focuses on two dimensions of fiscal policy that are critical for understanding the effects of government investment: implementation delays associated with building public capital projects and expected future fiscal adjustments to debt-financed spending. Implementation delays can produce small or even negative labor and output responses in the short run; anticipated fiscal financing adjustments matter both quantitatively and qualitatively for long-run growth effects. Taken together, these two dimensions have important implications for the short-run and long-run impacts of fiscal stimulus in the form of higher government infrastructure investment. The analysis is conducted in several models with features relevant for studying government spending, including utility-yielding government consumption, time-to-build for private investment, and government production.

download in pdf format
   (885 K)

email paper

This paper is available as PDF (885 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w15153

Published: “Government Investment and Fiscal Stimulus,” Journal of Monetary Economics 57(8): 1000- 1012, 2010 (with Todd B. Walker and Shu-Chun Susan Yang)

Users who downloaded this paper also downloaded these:
Davig and Leeper w15133 Monetary-Fiscal Policy Interactions and Fiscal Stimulus
Hall w15496 By How Much Does GDP Rise if the Government Buys More Output?
Christiano, Eichenbaum, and Rebelo w15394 When is the government spending multiplier large?
Leeper, Plante, and Traum w15160 Dynamics of Fiscal Financing in the United States
Auerbach and Gale w15407 Activist Fiscal Policy to Stabilize Economic Activity
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us