Effects of Fiscal Stimulus in Structural Models

Author/Editor:

Annabelle Mourougane ; Carlos de Resende ; Charles Freedman ; Christopher J. Erceg ; Davide Furceri ; Dirk V Muir ; Douglas Laxton ; Günter Coenen ; Jan in ‘t Veld ; Jesper Lindé ; John Roberts ; Mathias Trabandt ; Michael Kumhof ; René Lalonde ; Stephen Snudden ; Susanna Mursula ; Werner Roeger

Publication Date:

March 1, 2010

Electronic Access:

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Summary:

The paper assesses, using seven structural models used heavily by policymaking institutions, the effectiveness of temporary fiscal stimulus. Models can, more easily than empirical studies, account for differences between fiscal instruments, for differences between structural characteristics of the economy, and for monetary-fiscal policy interactions. Findings are: (i) There is substantial agreement across models on the sizes of fiscal multipliers. (ii) The sizes of spending and targeted transfers multipliers are large. (iii) Fiscal policy is most effective if it has some persistence and if monetary policy accommodates it. (iv) The perception of permanent fiscal stimulus leads to significantly lower initial multipliers.

Series:

Working Paper No. 10/73

Subject:

English

Publication Date:

March 1, 2010

ISBN/ISSN:

9781451982169/1018-5941

Stock No:

WPIEA2010073

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

121

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