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| Gianluca Lagana and Pasquale Sgro |
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| ''Fiscal Policy and US-Canadian Trade'' |
| ( 2011, Vol. 31 No.2 ) |
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| A factor-augmented vector autoregressive (FAVAR) model is applied to determine the effects of a rise in US government expenditure on the United States and Canadian economies. The results obtained reasonably characterize the effect of a rise in US government spending to the United States and Canadian economies emphasizing the role of the traded goods sector.
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| Keywords: Factor Model, Principal Component, Government expenditure, VAR. |
JEL: E3 - Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data)
E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General |
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| Manuscript Received : Nov 03 2010 | | Manuscript Accepted : Jun 25 2011 |
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