Increasing Corporate and Government Spending: Can Ergonomics Help?

How Can Government Spending Stimulate Consumption?

Recent empirical work finds that government spending shocks can cause aggregate consumption to increase. This paper builds on the framework of imperfect information in Lucas (1972) and Lorenzoni (2009) to show how government spending can stimulate consumption. Owners of firms targeted by an increase in government spending perceive an increase in their permanent income relative to their future t...

Increasing returns, capital utilization, and the effects of government spending

We show that a one-sector real business cycle model with mild increasing returns-to-scale, variable capital utilization and saddle-path stability is able to produce qualitatively realistic business cycles driven solely by disturbances to government purchases. Due to an endogenous increase in labor productivity, a positive spending shock can lead to simultaneous increases in output, consumption,...

Government Spending and Growth

Increasing Returns, Capital Utilization, and the E¤ects of Government Spending¤

We show that a one-sector real business cycle model with mild increasing returns-toscale and variable capital utilization is able to produce qualitatively realistic business cycles driven solely by aggregate demand shocks. In particular, a positive government spending shock can lead to simultaneous increases in output, consumption, investment, employment, labor productivity and the real wage. O...

Corporate Political Spending and the Size Effect

In the years since Citizens United v. FEC,1 corporate-political-spending disclosure has become an increasingly heated public policy issue. The portion of the Court’s opinion that championed shareholder rights to make decisions about corporate political speech generated a substantial, interdisciplinary literature,2 and shareholders responded by demanding political-spending disclosure through a b...