Title: The empirical effects of anticipated and unanticipated government spending shocks in the United States
Authors: Thomas van Gemert - Maastricht University (Netherlands) [presenting]
Lenard Lieb - Maastricht University (Netherlands)
Abstract: The dynamic effects of anticipated and unanticipated government spending shocks in the United States are investigated. To this aim, we link narrative records on defense spending news to the legislative decision process and use the lag between the announcement date in the narrative record and actual legal implementation to differentiate between unanticipated and anticipated shocks. We find empirical evidence that unanticipated spending shocks result in higher multiplier effects than anticipated ones. Private consumption and investment are crowded-out by anticipated shocks, but not by unanticipated shocks.