Government Spending Review 2002

Government Spending and Growth

Government Spending: An Economic Boost?

The severe global economic downturn and the large stimulus programs that governments in many countries adopted in response have generated a resurgence in research on the effects of fiscal policy. One key lesson emerging from this research is that there is no single fiscal multiplier that sums up the economic impact of fiscal policy. Rather, the impact varies widely depending on the specific fis...

How Can Government Spending Stimulate Consumption?

Recent empirical work finds that government spending shocks can cause aggregate consumption to increase. This paper builds on the framework of imperfect information in Lucas (1972) and Lorenzoni (2009) to show how government spending can stimulate consumption. Owners of firms targeted by an increase in government spending perceive an increase in their permanent income relative to their future t...

Government health care spending and child mortality.

BACKGROUND Government health care spending (GHS) is of increasing importance to child health. Our study determined the relationship between reductions in GHS and child mortality rates in high- and low-income countries. METHODS The authors used comparative country-level data for 176 countries covering the years 1981 to 2010, obtained from the World Bank and the Institute for Health Metrics and...

How Does Government Spending Stimulate Consumption ?

Recent empirical work finds that government spending shocks cause aggregate consumption to increase over the business cycle, contrary to the predictions of Neoclassical and New Keynesian models. This paper proposes a mechanism to account for the consumption increase that builds on the framework of imperfect information in Lucas (1972) and Lorenzoni (2009). In my model, owners of firms targeted ...