Identifying Government Spending Shocks

"I think Valerie Ramey’s work is the best in terms of empirically trying to figure what the effect is of expenditure on the macro-variables. She has focused mostly on the post-World War Two period, but she’s looked somewhat at the earlier part. Since part of the remedy for the current crisis is this fiscal stimulus package –which particularly revolves around this Keynesian multiplier – then Valerie’s work is especially relevant there and is probably the best recent work on that topic that I know of."