Economics, Econometrics and Finance
4 years ago

Noisy fiscal policy dampens economic growth, reduces fiscal multiplier impact.

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RePEc: Research Papers in Economics
An Analytical Characterization of Noisy Fiscal Policy
Patrick Fève, Tannous Kass-Hanna, Mario Pietrunti

Paper Summary

The article analyzes how unexpected news impacts government spending decisions. By using a model that considers factors like capital and labor, the researchers found that noisy news weakens the effects of planned government actions on the economy, leading to a decrease in the fiscal multiplier.

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