Identifying government spending shocks in the U.K: A novel instrumental approach based on natural disasters.

识别英国的政府支出冲击：一种基于自然灾害的新工具方法。在2007年全球金融危机之后，许多国家采取了大规模的财政刺激方案，包括增加政府支出和减税，以提振经济活动。这些一揽子计划大多基于凯恩斯主义的观点，即扩张性财政政策可以缓解经济衰退，防止经济资源浪费。根据这一理由，2008年，联合王国是带头呼吁扩大财政以刺激总需求和帮助抵消全球经济衰退的主要经济体之一。采取此类措施重新引起了学者和政策制定者的兴趣，他们想知道财政政策是否有效，以及在多大程度上有效。这种兴趣最近被新冠肺炎危机后的大规模财政回应进一步激发。尽管它很重要，但对于财政政策在稳定经济方面的有效性，仍然没有达成共识(克洛因，2013年；雷米，2011年；默滕斯和拉文，2012年；利珀等人，2013年)。缺乏共识的一个主要原因在于，很难确定进行因果分析所需的原始的、未预料到的政策冲击(即财政政策的变化与其他宏观经济波动无关)。现有文献提出了识别财政冲击的各种方法来解决这一问题。这些涉及VAR系统和工具中的时间和符号限制(Ramey，2016)。不幸的是，这些技术中的每一种都表现出了弱点，这引发了人们对实证研究结果的担忧。例如，短期限制方法受到预期问题的影响。具体地说，由于政府支出或减税通常是在实施前几个季度宣布的，它没有考虑到预期的变化，这导致低估了财政政策的效果(见Merten和Ravn，2010)。同样，基于一大组合理模型计算脉冲响应的符号限制使得结构分析的信息更少(Braun和Bruggemann，2022)。近年来越来越流行的一种方法是识别冲击使用的工具。如Ramey(2016)所示，利用适当工具的变化处理财政前瞻性(预期)问题，并提供稳健的结果。使用工具进行鉴定的主要挑战是工具本身的选择。选定的仪器必须与感兴趣的电击相关，并与其余电击垂直。这些情况是无法测试的，因此，使用仪器进行电击识别的应用经常因为缺乏严格的外源性1或相关性低而受到批评。关于政府开支冲击，现有的大多数文献都利用军事开支的差异来构建识别工具。潜在的假设是，军事支出构成了与经济状况无关的政府支出(Ramey and Shapiro，1998；Ramey，2011；Ben Zeev and Pappa，2017)。然而，Ramey(2016)认为，根据军事支出的历史记录构建的政府支出冲击的替代物，对于后朝鲜战争样本来说是薄弱的工具。

Identifying government spending shocks in the U.K:A novel instrumental approach based on natural disasters.Following the global financial crisis of 2007, many countries resorted to significant fiscal stimulus packages, consisting of increased government spending and tax cuts, to boost economic activity. Most of these packages were based on the Keynesian view that expansionary fiscal policy can mitigate the economic downfall and prevent the waste of economic resources. In line with this rationale, in 2008, the United Kingdom was one of the major economies to lead calls for fiscal expansion to stimulate aggregate demand and help offset the global economic downturn. Adopting such measures generated a renewed interest among academics and policymakers in whether and to what extent fiscal policies are effective. This interest was recently further stimulated by the massive fiscal response that followed the Covid-19 pandemic.Despite its importance, there is still no consensus over the effectiveness of fiscal policy in stabilising the economy (Cloyne, 2013; Ramey, 2011; Mertens and Ravn, 2012; Leeper et al., 2013). A prime reason for this lack of consensus lies in the difficulty of identifying primitive, unanticipated policy shocks (i.e. changes in fiscal policy not correlated with other macroeconomic fluctuations) which are required for conducting a causal analysis. The existing literature has proposed various methods for identifying fiscal shocks to address this. These involve time and sign restrictions in a VAR system and instruments (Ramey, 2016). Unfortunately, each of these techniques exhibits weaknesses that raise concerns about the findings of empirical studies. For instance, the short-run restriction approach suffers from anticipation issues. Specifically, because government expenditure or tax cuts are usually announced several quarters before they take place, it fails to account for changes in expectations which leads to underestimation of the effect of fiscal policy (see Mertens and Ravn, 2010). Similarly, sign restrictions that compute impulse responses based on a large set of plausible models make the structural analysis less informative (Braun and Bruggemann, 2022).A method which has been gaining popularity in recent years is the identification of shocksusing instruments. As shown by Ramey (2016), exploiting variation from proper instruments deals with the problem of fiscal foresight (anticipation) and provides robust results. The mainchallenge of identification using instruments is the selection of the instrument itself. Theselected instrument must be correlated with the shock of interest and orthogonal to the restof the shocks. These conditions are untestable, and as a consequence, applications of shockidentification using instruments are often criticised either for lack of strict exogeneity1 or forlow relevance. Regarding government spending shocks, most of the existing literature exploitsvariation in military spending to construct instruments for identification. The underlyingassumption is that military expenditures constitute government spending unrelated to thestate of the economy (Ramey and Shapiro, 1998; Ramey, 2011; Ben Zeev and Pappa, 2017).However, Ramey (2016) argues that proxies of government spending shocks constructedfrom historical records on military spending are weak instruments for the post-Korean warsamples.