-agent New Keynesian model, this paper shows analytically that the multiplier on targeted transfers to financially constrained … households is (i) larger than the purchase multiplier if the zero lower bound (ZLB) binds, and (ii) is more sensitive to the …, such as when the zero lower bound binds, the extra inflation from lower supply boosts the multiplier. This result also …

multiplier nontrivially when the policy rate is constrained at the zero lower bound (ZLB). In the economy with policy inertia … the recession via expectations. In our baseline calibration, the output multiplier at the ZLB is 2.5 when the weight on …

. My results suggest that for fiscal consolidations, the tax multiplier is larger than the spending multiplier. My … estimates indicate that whereas the tax multiplier is roughly 3 — similar to the recent estimates derived by Romer and Romer … (2010), the spending multiplier is close to zero. A number of caveats accompany these results, however …