scholarly journals Investigating government spending multiplier for the US economy: empirical evidence using a triple lasso approach

2021 ◽  
Author(s):  
Zacharias Bragoudakis ◽  
Dimitrios Panas
Keyword(s):  
Empirical Evidence ◽  
Government Spending ◽  
Us Economy ◽  
Lag Selection ◽  
The Us ◽  
The Government ◽  
The Military

An essential dilemma in economics that has yielded ambiguous answers is whether governments should spend more in recessions. This paper provides an extension of the work of Ramey & Zubairy (2018) for the US economy according to which the government spending multipliers are below unity, especially when the economy experiences severe slack. Nonetheless, their work suffered from some limitations with respect to invertibility and weak instrument problem. The contribution of this paper is twofold: Firstly, it provides evidence that a triple lasso approach for the lag selection is a useful tool in removing the invertibility issues and the weak instrument problem. Secondly, the main results using a triple lasso approach suggest multipliers below unity for most cases with no evidence for differences between different states of the economy. Nevertheless, re-running the code in Ramey & Zubairy (2018), the case where WWII is excluded exhibits multipliers above unity, in both the military news and Blanchard-Perotti specifications, contradicting their baseline findings and providing evidence for a more effective government spending in recessions.

Military Subsidization of Human Capital and Gender Stratification in the US Economy

2021 ◽  
pp. 048661342098262
Author(s):  
Tyler Saxon
Keyword(s):  
Human Capital ◽  
The United States ◽  
Jel Classification ◽  
Access To Higher Education ◽  
Gender Stratification ◽  
Us Economy ◽  
The Us ◽  
And Gender ◽  
Capital Development ◽  
The Military

In the United States, the military is the primary channel through which many are able to obtain supports traditionally provided by the welfare state, such as access to higher education, job training, employment, health care, and so on. However, due to the nature of the military as a highly gendered institution, these social welfare functions are not as accessible for women as they are for men. This amounts to a highly gender-biased state spending pattern that subsidizes substantially more human capital development for men than for women, effectively reinforcing women’s subordinate status in the US economy. JEL classification: B54, B52, Z13

Rethinking U.S. National Security after Covid19

2020 ◽  
Vol 26 (3) ◽  
Author(s):  
Linda J. Bilmes
Keyword(s):  
Climate Change ◽  
United States ◽  
National Security ◽  
The United States ◽  
Emerging Diseases ◽  
Defense Spending ◽  
Federal Spending ◽  
Us Economy ◽  
The Us ◽  
The Military

AbstractThe United States has traditionally defined national security in the context of military threats and addressed them through military spending. This article considers whether the United States will rethink this mindset following the disruption of the Covid19 pandemic, during which a non-military actor has inflicted widespread harm. The author argues that the US will not redefine national security explicitly due to the importance of the military in the US economy and the bipartisan trend toward growing the military budget since 2001. However, the pandemic has opened the floodgates with respect to federal spending. This shift will enable the next administration to allocate greater resources to non-military threats such as climate change and emerging diseases, even as it continues to increase defense spending to address traditionally defined military threats such as hypersonics and cyberterrorism.

Determining the Legitimacy of Laws That Use Racial/Ethnic Classifications

2017 ◽  
Author(s):  
Roger J.R. Levesque
Keyword(s):  
Empirical Evidence ◽  
Legal System ◽  
Differential Treatment ◽  
Equal Treatment ◽  
Equal Protection ◽  
Equal Opportunities ◽  
The Us ◽  
Us Constitution ◽  
The Government ◽  
Racial Ethnic

Under the US Constitution, the government must ensure that individuals receive the equal protection of laws. This mandate, however, becomes challenging in that equal protection may be different depending on the involved individuals and circumstances. This chapter examines the general parameters of how the legal system addresses claims alleging violations of rights, such as those involving differential treatment based on race. The analysis demonstrates when discrimination exists in law and, equally important, discusses what is needed to envision ways to reach societal interests relating to equal opportunities and equal treatment. The chapter concludes by noting how these legal developments influence the potential relevance and utility of empirical evidence.

Prospects for Individual Economies

2011 ◽  
Vol 215 ◽  
pp. F16-F24
Keyword(s):  
Current Account ◽  
Government Spending ◽  
World Trade ◽  
Domestic Demand ◽  
Full Recovery ◽  
Current Account Balance ◽  
Consumer Spending ◽  
Import Penetration ◽  
Us Economy ◽  
The Us

Our estimates indicate that the US economy regained pre-crisis levels of output in the final quarter of 2010, with a full recovery in the levels of consumer spending as well as both exports and imports (see figure 2 above). Investment and inventory levels, however, remain well below pre-crisis levels, offset by higher government spending. The pace of recovery moderated in the second and third quarters of 2010, when annualised growth averaged 2.1 per cent per quarter, somewhat below potential. However, the slowdown was more a reflection of a recovery in import penetration and correction to the level of world trade than a sign of global slump. Domestic demand expanded at an average annualised rate of 4.7 per cent per quarter, pulling in imports and allowing the net trade position to worsen. In the final quarter of the year import growth appears to have moderated, and we expect the current account balance to have stabilised at 3½ per cent of GDP. We estimate that GDP expanded by 2.9 per cent in 2010 as a whole.

scholarly journals Uncertainty and nonlinear macroeconomic effects of fiscal policy in the US: a SEIVAR-based analysis

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ansgar Belke ◽  
Pascal Goemans
Keyword(s):  
Government Spending ◽  
Large Set ◽  
Impulse Response Functions ◽  
Uncertainty Distribution ◽  
Content Type ◽  
Macroeconomic Uncertainty ◽  
The Us ◽  
Macroeconomic Effects ◽  
The Government

PurposeThe purpose of this paper is to investigate whether the macroeconomic effects of government spending shocks vary with the degree of macroeconomic uncertainty.Design/methodology/approachThe authors use quarterly US data from 1960 to 2017 and employ the Self-Exciting Interacted VAR (SEIVAR) to compute nonlinear generalized impulse response functions (GIRFs) to an orthogonalized government spending shock during tranquil and in uncertain times. The parsimonious design of the SEIVAR enables us to focus on extreme deciles of the uncertainty distribution and to control for the financing side of the government budget, monetary policy, financial frictions and consumer confidence.FindingsFiscal spending has positive output effects in tranquil times, but is contractionary during times of heightened macroeconomic uncertainty. The results indicate an important role of the endogenous response of macroeconomic uncertainty. Investigating different government spending purposes, only increases in research and development expenditures reduce uncertainty and boost output during uncertain times.Originality/valueThe authors contribute to the literature in using a method which allows to control for a large set of confounding factors and accounts for the uncertainty response.

COVID-19 will hit US GDP but recovery may be V-shaped

2020 ◽  
Keyword(s):  
Market Liquidity ◽  
Economic Downturn ◽  
Content Type ◽  
The Public ◽  
Us Economy ◽  
The Us ◽  
Home Sales ◽  
The Government ◽  
National Emergency ◽  
Economic Outlook

Subject US economic outlook. Significance Before the COVID-19 outbreak, economic activity was growing at 2.0-2.5%, the stock market and employment were close to record highs, new home sales were rising and consumer spending had momentum. The immediate outlook for the US economy is now very unclear as the number of COVID-19 cases has surged above 3,800 and the virus is present in 49 states, prompting President Donald Trump to declare a national emergency on March 13. To bolster financial market liquidity and support businesses and households, the Federal Reserve (Fed) cut rates by 100 basis points to 0-0.25% on March 15. Impacts The public spending for the COVID-19 outbreak will add to the budget deficit as no party is willing to raise taxes in an election year. The Fed may cut rates more but will risk inflation if rates stay low too long; if recovery is rapid, rates may rise sooner than expected. Heavily indebted firms and individuals will seek assistance from the government, especially in the travel and entertainment industries. A sharper economic downturn will test Trump’s managerial skill as his voters expect him to be able to resolve their problems quickly.

Crisis in the Civil-Military Triangle?

2020 ◽  
pp. 191-206
Author(s):  
William E. Rapp
Keyword(s):  
United States ◽  
The United States ◽  
Civil Military Relations ◽  
Us Military ◽  
The People ◽  
The Us ◽  
High Regard ◽  
The Government ◽  
Military Relations ◽  
The Military

Despite the high regard for the US military by the American public, a number of tensions continue to grow in civil-military relations in the United States. These are exacerbated by a lack of clarity, and thus productive debate, in the various relationships inherent in civil and military interaction. By trisecting civil military relations into the relations between the people and the military, the military and the government, and the people and the government on military issues, this chapter examines the potential for crisis in coming years. Doing so allows for greater theoretical and popular understanding and thus action in addressing the tensions, for there is cause for concern and action in each of the legs of this interconnected triangle.

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