We relate our solution methodology to other popular approaches to solving multivariate linear rational expectations models, and provide user-friendly code that executes our approach. This paper investigates industry-level effects of government purchases in order to shed light on the transmission mechanism for government spending on the aggregate economy. Aga, Liviu-Adrian ; Stnic, Florina-Adriana. Full description at Download 2016. Aggregate Fluctuations with Increasing Return to Specialization and Scale. These results are robust to political factors. Bary, Pakasa ; Satyanugroho, Redianto ; Panjaitan, Linda ; Harahap, Berry.
Valencia, Fabian ; Laeven, Luc. Tapsoba, Sampawende ; Mlachila, Montfort ; Sampawende J. Valencia, Fabian ; Laeven, Luc. Instead, cuts in marginal labour tax rates are inflationary and become more expansionary when the zero lower bound is binding. Full description at Download 129 32 1997. In most cases, it weighs on demand in the short term.
This paper generalizes the nonparametric approach to option pricing of Stutzer 1996 by demonstrating that the canonical valuation methodology in- troduced therein is one member of the Cressie-Read family of divergence mea- sures. Full description at Download 49 17 1994. We argue and present evidence that it is not confidence per se — in the sense of pure sentiment — that matters for the transmission of spending shocks during downturns, but rather that the composition of spending during a downtown is different. The government spending multiplier is estimated to be larger during recessions and banking stress periods, but much smaller or even negative during periods of weak public finances. We give households a joint probability distribution over the various policy adjustments that may occur, as well as over the timing of when the fiscal limit is hit.
Full description at Download 2016. The larger the fraction of government spending that occurs while the nominal interest rate is zero, the larger the value of the multiplier. Governments may either coordinate fiscal policy or not, and three forms of delegation are considered: Rogoff-type 'weight independence,' inflation targets and linear inflation contracts. Because of modeling uncertainty, it is essential that such policy evaluations be robust to alternative modeling assumptions and different parameterizations. As long as convertibility of bank notes into specie was maintained, there was no systematic relation of government spending to monetary growth.
Our paper addresses this question in a model environment in which the duration of the liquidity trap is determined endogenously, and depends on the size of the fiscal stimulus. The main findings hold when using forecasts from national draft budgets. Manera, Matteo ; Bastianin, Andrea ; Lanza, Alessandro. We show how our approach permits closed-form expressions for higher-order beliefs and can be used to solve a variety of dispersed informational setups. The policy response increase in the primary fiscal balance in response to debt increases is found to be significantly weaker when sovereign borrowing costs are low, inflation is high, and potential economic growth worsens unexpectedly. Full description at Download 34 40 2010.
The paper begins by pointing out similarities and differences between the Weimar Republic after World War I and the United States today. In: Theoretical and Applied Economics. While the limiting distribution of the alternative measures is identical to the canonical measure, the finite sample properties are quite different. Incomplete stabilization of marginal costs due to the existence of the zero lower bound is a crucial factor in understanding the effects of fiscal policy in open economies. Full description at Download 2016.
One result has a distinctly nonstandard flavor: both increases in taxes and increases in government spending have a strong negative effect on investment spending. In: Theoretical and Applied Economics. To this aim, we employ a very large data set of individual banks' balance sheets, combined with a newly compiled data set on fiscal consolidations. Assuming that lagged spending is exogenous to current output brings the estimate of the overall multiplier up to 1. Full description at Download 2016.
The 2009-2010 packages need not produce significant output multipliers, may have moderate debt effects, and only generate temporary inflation. We find that there is a bias towards defficit in public sector size and long-run bidirectional causality between public revenues and expenditure, although the direction of causality seems to hold mainly from public expenditure to revenues. In countries with unidirectional causality running from government expenditure to economic growth, government can employ expenditure as a factor for growth. Full description at Download 35 35 2013. An important property of the equilibria is a dynamic response of endogenous variables to economic shocks that displays waves of optimism and pessimism which are not present in the full information counterpart. In: Theoretical and Applied Economics.
Full description at Download 2016. American Economic Journal: Economic Policy. Economies that have promised substantially more benefits than they have made provision to finance are heading into a prolonged era of fiscal stress. Economies that have promised substantially more benefits than they have made provision to finance are heading into a prolonged era of fiscal stress. Using Jorda's 2005 method for estimating impulse responses, we find no evidence that multipliers are greater during periods of high unemployment in the United States.