IDEAS home Printed from https://ideas.repec.org/a/kap/pubcho/v97y1998i1-2p141-57.html
   My bibliography  Save this article

Persistence in Government Spending Fluctuations: New Evidence on the Displacement Effect

Author

Listed:
  • Goff, Brian

Abstract

In spite of A. T. Peacock and J. Wiseman's (1961) NBER study demonstrating the 'displacement effect,' simplistic theoretical and empirical distinctions between temporary and permanent spending are common. In this paper, impulse response functions from ARMA models, as well as J. H. Cochrane's (1988) nonparametric method, support Peacock and Wiseman's conclusion by showing (1) government spending in the aggregate displays strong persistence to temporary shocks, (2) simple decomposition methods intended to yield a 'temporary' spending series have a weak statistical foundation, and (3) persistence in spending has increased during this century. Also, as a basic 'fact' of government spending behavior, the displacement effect lends support to interest group and bureaucracy models of government spending growth. Copyright 1998 by Kluwer Academic Publishers

Suggested Citation

  • Goff, Brian, 1998. "Persistence in Government Spending Fluctuations: New Evidence on the Displacement Effect," Public Choice, Springer, vol. 97(1-2), pages 141-157, October.
    • Handle: RePEc:kap:pubcho:v:97:y:1998:i:1-2:p:141-57
    as

    Download full text from publisher

    File URL: http://journals.kluweronline.com/issn/0048-5829/contents
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Durevall, Dick & Henrekson, Magnus, 2011. "The futile quest for a grand explanation of long-run government expenditure," Journal of Public Economics, Elsevier, vol. 95(7), pages 708-722.
    2. Irandoust, Manuchehr, 2019. "Wagner on government spending and national income: A new look at an old relationship," Journal of Policy Modeling, Elsevier, vol. 41(4), pages 636-646.
    3. Manuel Jaén-García, 2021. "Displacement Effect and Ratchet Effect: Testing of Two Alternative Hypotheses," SAGE Open, , vol. 11(1), pages 21582440211, March.
    4. Winer, Stanley L. & Ferris, J. Stephen, 2008. "Searching for Keynesianism," European Journal of Political Economy, Elsevier, vol. 24(2), pages 294-316, June.
    5. Bateman, Fred & Taylor, Jason E., 2003. "The New Deal at war: alphabet agencies' expenditure patterns, 1940-1945," Explorations in Economic History, Elsevier, vol. 40(3), pages 251-277, July.
    6. John Ashworth & Bruno Heyndels, 2001. "Political Fragmentation and the Evolution of National Tax Structures in the OECD," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 8(4), pages 377-393, August.
    7. Stanley L. Winer & J Stephen Ferris, 2003. "Searching for Keynes: An Essay on the Political Economy of Fiscal Policy, with Application to Canada, 1870-2000 - revised version," CESifo Working Paper Series 1016, CESifo.
    8. Julie Tam & Heather Kirkham, 2000. "Automatic Fiscal Stabilisers: Implications for New Zealand," Treasury Working Paper Series 01/10, New Zealand Treasury, revised 2001.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:97:y:1998:i:1-2:p:141-57. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.