What Is the Importance of Monetary and Fiscal Shocks in Explaining U.S. Macroeconomic Fluctuations? Academic Article uri icon


  • This paper analyzes the importance of monetary and fiscal policy shocks in explaining U.S. macroeconomic fluctuations, and establishes new stylized facts. The novelty of our empirical analysis is that we jointly considerbothmonetary and fiscal policy, whereas the existing literature only focuses on either one or the other. Our main findings are twofold: fiscal shocks are relatively more important in explaining medium cycle fluctuations whereas monetary policy shocks are relatively more important in explaining business cycle fluctuations, and failing to recognize that both monetary and fiscal policy simultaneously affect macroeconomic variables might incorrectly attribute the fluctuations to the wrong source. 2011 The Ohio State University.

published proceedings

  • Journal of money credit and banking

altmetric score

  • 3

author list (cited authors)

  • ROSSI, B., & ZUBAIRY, S.

citation count

  • 67

complete list of authors


publication date

  • September 2011