This paper presents simulations with a multicountry structural model to show that worldwide expansionary fiscal policy combined with accommodative monetary policy can have significant multiplier effects on the world economy. It also provides a framework for assessing the effects of fiscal...

This paper discusses deflation risks and policy options. The paper highlights that slumping collateral values have exacerbated the credit crunch, and monetary policy has lost effectiveness in stabilizing output. A model-based analysis for the G3 economies (United States, euro area, and Japan)...