208-2011-L6

208-2011-L6 - Econ208 MarekKapicka Lecture6...

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Econ 208 Marek Kapicka Lecture 6 The Effects of Government Spending Social Security
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Empirical Evidence n Main question: n How does consumption and wages  respond to an increase in government  spending? n Valerie Ramey (2008): n The effects of military expenditures n Largely unrelated to other economic factors
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Real Government Spending Per Capita
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The effects on GDP  
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The Effects on Consumption and Wages  
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World War II n A more serious model includes n Changes in capital and labor taxes n Forced Military Employment n McGrattan and Ohanian, “Does  Neoclassical Theory account for the  Effects of Big Fiscal Shocks? Evidence  from WWII”
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GDP, Consumption, and Government  Expenditures during WWII
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World War II
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World War II  
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World War II  
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World War II
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World War II
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Roadmap n Government Expenditures n A) Data on Govt Expenditures n B) Permanent Changes in Gov’t Spending n C) Temporary Changes in Gov’t Spending n D) Empirical Evidence n E) Transfers: Social Security
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Transfers  
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208-2011-L6 - Econ208 MarekKapicka Lecture6...

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