On the Measurement of the Government Spending Multiplier in the United States: an ARDL Cointegration Approach
Ebadi, E
Date: 18 October 2018
Journal
Economic Research Guardian
Publisher
Weissberg Publishing
Related links
Abstract
This paper applies annual data from 1962 to 2011 to investigate the long run relationship between government
spending and Gross Domestic Product (GDP). The common approach only considers defense government spending to
estimate the multiplier to overcome the identification problem and endogeneity in isolating the effect of changes ...
This paper applies annual data from 1962 to 2011 to investigate the long run relationship between government
spending and Gross Domestic Product (GDP). The common approach only considers defense government spending to
estimate the multiplier to overcome the identification problem and endogeneity in isolating the effect of changes in
government spending on GDP, I use the Autoregressive Distributed Lag (ARDL) approach to cointegration, which
works despite having endogenous regressors to estimate the spending multiplier. The results confirm that government
spending can be treated as a ‘long-run forcing’ variable for the explanation of real GDP and the long-run multiplier is
found to be 1.94.
Economics
Faculty of Environment, Science and Economy
Item views 0
Full item downloads 0