The
present discounted value of government spending over, say, the lifetime of a military acquisition
program is fixed in advance and therefore predictable; it is the timing of the
actual cash disbursements or deliveries in each quarter that is partly unpredictable. But
in a world with perfect credit markets, changes in the timing of deliveries or cash disbursements,
which do not affect the timing and quantity of the inputs used, have little or
no effect on real private sector variables. Hence, these “delivery” or “cash” shocks are
essentially noise