01632cas a2200253 a 4500 AALejournalIMF000309 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451843712 1018-5941 BD-DhAAL BD-DhAAL Aziz, Jahangir. Cyclical Effects of the Composition of Government Purchases / Jahangir Aziz, Luc Leruth. Washington, D.C. : International Monetary Fund, 1997. 1 online resource (38 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper constructs a general equilibrium model with monopolistically competitive firms and endogenous markups where government spending consists of both consumption and investment goods. It is shown that when markups are countercyclical, increases in the share of investment goods in aggregate government expenditure entail a trade-off between greater long- run efficiency and higher short-run volatility. Estimates based on the model, calibrated to the postwar U.S. economy, show that the effects on output, employment, and welfare can be significant. Mode of access: Internet Leruth, Luc. IMF Working Papers; Working Paper ; No. 1997/019 Full text available on IMF http://elibrary.imf.org/view/journals/001/1997/019/001.1997.issue-019-en.xml IMF e-Library