Essays on Nonlinearities and Structural Breaks in the Relationships between Macroeconomic Variables

<p>The dissertation is set out in three chapters, focusing on the structural changes that led to jobless recoveries in following the past three recessions, the asymmetric effects of fiscal stimulus over the business cycle, and the asymmetric effects of fiscal cuts and stimulus respectively. In the first chapter, I examine the three leading theoretical explanations for the recent jobless recoveries using a correlated unobserved components model of aggregate data for output, sales, employment, and hours. The main finding is that employment now respond to demand shocks in a way that is consistent with just-in-time utilization of labor resources. The second and the third chapter focus on asymmetric responses to fiscal policy. In the second chapter, I investigate the effects of government spending on U.S. economic activity using a threshold version of a structural vector autoregressive model. The empirical findings support state-dependent effects of fiscal policy. In particular, the effects of a government spending shock on output are significantly larger and more persistent when the economy has a high degree of underutilized resources than when the economy is close to capacity. The third chapter examines whether there are sign and size asymmetries in the responses of output, output components, and employment to fiscal policy. When the economy is not constrained, a large fiscal stimulus is more effective at increasing employment and output, and cuts have larger effects than increases.</p>

Name thesis:degree_name

Doctor of Philosophy (PhD)

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Economics

Year dc:date.available

2013

Author dc:creator

• Panovska, Irina B.

Contributors dc:contributor

• Werner Ploberger

• fiscal policy
• jobless recoveries
• non-linear models
• size and sign asymmetry
• state-dependence
• threshold
• Economics

Language dc:language

English (en)

DOI

https://doi.org/10.7936/K71V5C12

OAI identifier oai:identifier

oai:openscholarship.wustl.edu:etd-2081