We calculate the magnitude of the government consumption multiplier in linearized and nonlinear solutions of a New Keynesian model at the zero lower bound. Importantly, the model is amended with real rigidities to simultaneously account for the macroeconomic evidence of a low Phillips curve...

We estimate a New Keynesian small open economy model which allows for foreign exchange (FX) market frictions and a potential role for FX interventions for a large set of emerging market economies (EMEs) and some inflation targeting (IT) advanced economy (AE) countries serving as a control group....

Recent influential work argue that a gradual increase in sales tax stimulates economic activityin a liquidity trap by boosting inflation expectations. Higher public infrastructure investmentshould also be more expansive in a liquidity trap than in normal times by raising the potentialinterest...