Replication data for: Measuring How Fiscal Shocks Affect Durable Spending in Recessions and Expansions

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Project Citation:

Berger, David, and Vavra, Joseph. Replication data for: Measuring How Fiscal Shocks Affect Durable Spending in Recessions and Expansions. Nashville, TN: American Economic Association [publisher], 2014. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-11. https://doi.org/10.3886/E112765V1

Project Description

Summary: We estimate how durable expenditures respond to government spending shocks at different points in the business cycle using a nonlinear VAR approach that allows for the durable multiplier to vary smoothly with the state of the economy. We find strong evidence that the aggregate durable spending response to fiscal shocks is substantially larger during expansions than during recessions, in contrast to what has been has been observed for the aggregate multiplier. We argue that these results are consistent with the theoretical predictions of the fixed cost model of durable demand in Berger and Vavra (2012).

Scope of Project

JEL Classification:
      E21 Macroeconomics: Consumption; Saving; Wealth
      E22 Investment; Capital; Intangible Capital; Capacity
      E32 Business Fluctuations; Cycles
      E62 Fiscal Policy
      G01 Financial Crises

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V1 [2019-10-11]

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