We propose a theory of indebted demand, capturing the idea that large debt burdens by households and governments lower … aggregate demand, and thus natural interest rates. At the core of the theory is the simple yet under-appreciated observation …

investment behavior. The bilateral external benefits induce an investment multiplier effect. This multiplier effect depends in a … characterize how the multiplier effect hinges on market size, and how it interacts with other important factors such as the costs …

multiplier. To this end we contrast two different ways to implement the ZLB in a New Keynesian model: the ZLB modeled as an … multiplier are not only due to differences in the timing assumption of government spending but also driven by the choice of the … ZLB modeling. Ceteris paribus, the impact multiplier is higher if the ZLB is modeled appropriately as a constraint. …

multiplier; (ii) positive long-run output multipliers are obtained only if the generational turnover effect is dominated by the …

between multiplier size and the import share. Employing an interacted panel VAR model for EU countries, we estimate the effect …

This paper shows that the fiscal multiplier for purchases of durable and investment goods is very small - much smaller … than the multiplier for nondurable goods. Standard models predict small durables multipliers because private sector …

Keynes' General Theory (1936) is arguably one of the most important books of the twentieth century. His ideas for … stabilizing the aggregate economy have profoundly influenced economic theory as well as popular opinion about what governments can … and should do with respect to the business cycle. On the other hand, whether Keynesian theory has substantially altered …