In response to the COVID-19 pandemic, G7 central banks have launched asset purchase programs in anticipation of an increase in government bond offerings to finance ballooning fiscal deficits. As the volume of government bonds owned by private investors is not expected to rise during the current...

Employing a stochastic Brownian pattern for labor income under liquidity constraints, the paper derives closed-form solutions for households" consumption and shows how both the multiplier and the variability of consumption increased after the global crisis and were further enhanced by the...