We consider the fiscal multiplier and spillover in an environment in which two countries are caught simultaneously in a … show that the fiscal multiplier and spillover are contrary to those predicted in textbook economics. For the country with … government expenditure, the fiscal multiplier exceeds one, the currency depreciates, and the terms of trade worsen. The fiscal …

multiplier. To this end we contrast two different ways to implement the ZLB in a New Keynesian model: the ZLB modeled as an … multiplier are not only due to differences in the timing assumption of government spending but also driven by the choice of the … ZLB modeling. Ceteris paribus, the impact multiplier is higher if the ZLB is modeled appropriately as a constraint. …