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This paper makes the argument that certain public goods (those lacking special interest backing) are likely to be under-provided by governments. Moreover, some such goods are complementary with private goods (e.g. roads and automobiles), while other such goods are substitutes for private goods...
Persistent link: https://www.econbiz.de/10014204825
Using a panel of 33 OECD countries we estimate government spending multipliers for 11 different categories (functions) of spending: General Public Services, Defense, Public Order and Safety, Transport & Communication, Economic Services, Environment Protection, Housing and Community Amenities,...
Persistent link: https://www.econbiz.de/10014081777
Recent quantitative dynamic general equilibrium models have cast serious doubts on the explanatory power of staggered wage/price setting in accounting for both output and inflation persistence. We enlarge a dynamic general equilibrium model with staggered wages by incorporating Keynesian...
Persistent link: https://www.econbiz.de/10014142948
This paper analyzes the implications of distortionary taxation and debt financing for optimal government spending policy in a sticky-price economy where the nominal interest rate is subject to the zero lower bound constraint. Regardless of the type of tax available and the initial debt level,...
Persistent link: https://www.econbiz.de/10013020784
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 …
Persistent link: https://www.econbiz.de/10013031117
multiplier is 1.5 in the ZLB period, and 0.6 outside of it. We argue that these results are not driven by the amount of slack in …
Persistent link: https://www.econbiz.de/10012979784
Previous studies argue that, based on the New Keynesian framework, a fiscal stimulus financed by money creation has a strong positive effect on output under a reasonable degree of nominal price rigidities. This paper investigates the effects of implementation lag in the money-financed fiscal...
Persistent link: https://www.econbiz.de/10012913393
This paper revisits the size of the fiscal multiplier. The experiment is a fiscal expansion under the assumption of a … multiplier can be unboundedly large. However, if the monetary-fiscal expansion is for a fixed T periods, the multiplier is much …
Persistent link: https://www.econbiz.de/10013104783
Only a few empirical studies have analyzed the relationship between fiscal multipliers and the underlying state of the economy. This paper investigates this link on a country-by-country basis for the G7 economies (excluding Italy). Our results show that fiscal multipliers differ across...
Persistent link: https://www.econbiz.de/10013088409
Previous studies argue that, based on the New Keynesian framework, a fiscal stimulus financed by money creation has a strong positive effect on output under a reasonable degree of nominal price rigidities. This paper investigates the effects of an implementation lag in a money-financed fiscal...
Persistent link: https://www.econbiz.de/10012893619