Why is it so difficult to estimate the effect of Government spending on the economy and how have economists addressed the problems?
Please refer to the RBC and new keynesian models. Please read and use the attached file as the base for this essay. Not all of the attached file, is relevant, such as the mathematical formula, you should focus mainly on the second half. The file includes 2 studies from the IMF, and Ramey(2019) which should also be useful for answering the question. The appendix of the file includes papers which will be useful in answering the question
