Calculate the ratio of total real government expenditure to GDP on a quarterly basis for an economy

Question:

Calculate the ratio of total real government expenditure to GDP on a quarterly basis for an economy of your choice for the period 1950–2015. Also calculate the real interest rate on a quarterly basis as a six-month Treasury bill rate minus the inflation rate. Plot these two variables as time series. The real intertemporal model predicts that a temporary increase in government spending increases the real interest rate. Do you observe anything in your chart that is consistent with this prediction? Why or why not?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Macroeconomics

ISBN: 9781292215792

6th Global Edition

Authors: Stephen Williamson

Question Posted: