multiplier. It presents a New Open Economy Macroeconomics model which is extended with the formation of 'deep habits' by … producers to move their markups counter-cyclically and generates a positive fiscal multiplier of private consumption. The main … outcome is a mechanism elaborating that both openness to trade and exchange rate exibility limit the fiscal multiplier in …

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 …