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Excess Savings and Twin Deficits : The Transmission of Fiscal Stimulus in Open Economies

Aggarwal, Rishabh; Auclert, Adrien; Rognlie, Matthew; … - 2022

We study the effects of debt-financed fiscal transfers in a general equilibrium, heterogeneous-agent model of the world economy. In the long run, increases in government debt anywhere raise the world interest rate and increase private wealth everywhere. In the short run, a country with a...

Persistent link: https://www.econbiz.de/10014081636

Fiscal Stimulus and Fiscal Sustainability

Auerbach, Alan J. - 2017

The Great Recession and the Global Financial Crisis have left many developed countries with low interest rates and high levels of public debt, thus limiting the ability of policymakers to fight the next recession. Whether new fiscal stimulus programs would be jeopardized by these already heavy...

Persistent link: https://www.econbiz.de/10012948076

Geographic Cross-Sectional Fiscal Spending Multipliers : What Have We Learned?

Chodorow-Reich, Gabriel - 2017

A geographic cross-sectional fiscal spending multiplier measures the effect of an increase in spending in one region in … Reinvestment Act and a survey of empirical studies, my preferred point estimate for a cross-sectional output multiplier is 1 ….8. Economic theory of how to map these multipliers into a national multiplier has also advanced. Drawing on the theoretical …

Persistent link: https://www.econbiz.de/10012951882

Taxes and Growth : New Narrative Evidence from Interwar Britain

Cloyne, James - 2018

The impact of fiscal policy on economic activity is still a matter of great debate. And, ever since Keynes first commented on it, interwar Britain, 1918- 1939, has remained a particularly contentious case | not least because of its high debt environment and turbulent business cycle. This debate...

Persistent link: https://www.econbiz.de/10012917612

The Finance Uncertainty Multiplier

Alfaro, Iván - 2018

We show how real and financial frictions amplify the impact of uncertainty shocks. We build a model with real frictions, and find adding financial frictions roughly doubles the impact of uncertainty shocks. Higher uncertainty alongside financial frictions induces the standard real-options...

Persistent link: https://www.econbiz.de/10012919868

The Fiscal Multiplier

Hagedorn, Marcus - 2019

We measure the size of the fiscal multiplier using a heterogeneous-agent model with incomplete markets, capital and ….We find that market incompleteness is key to determining the size of the fiscal multiplier, which is uniquely determined in … our model for any combination of fiscal and monetary policies of interest. The multiplier is 1.34 if deficit-financed and …

Persistent link: https://www.econbiz.de/10012892557

Ten Years after the Financial Crisis : What Have We Learned from the Renaissance in Fiscal Research?

Ramey, Valerie A. - 2019

This paper takes stock of what we have learned from the “Renaissance” in fiscal research in the ten years since the financial crisis. I first summarize the new innovations in methodology and discuss the various strengths and weaknesses of the main approaches. Reviewing the estimates, I come...

Persistent link: https://www.econbiz.de/10012893136

Bounded Rationality and Strategic Complementarity in a Macroeconomic Model : Policy Effects, Persistence and Multipliers

Bomfim, Antúlio N.; Diebold, Francis X. - 2021

policy effectiveness, output persistence and multiplier effects …

Persistent link: https://www.econbiz.de/10013222039

The Effects of a Money-Financed Fiscal Stimulus

Galí, Jordi - 2021

I analyze the effects of a money-financed fiscal stimulus and compare them with those resulting from a conventional debt-financed stimulus. I study the effects of both a tax cut and an increase in government purchases, with and without a binding zero lower bound (ZLB) on the nominal interest...

Persistent link: https://www.econbiz.de/10013238725

Tiebout Sorting, Social Multipliers and the Demand for School Quality

Bayer, Patrick J.; Ferreira, Fernando Vendramel; … - 2021

multiplier associated with heterogeneous preferences for peers and neighbors; initial changes in school quality set in motion a …

Persistent link: https://www.econbiz.de/10013239977