Effects of Fiscal Stimulus in Structural Models |
|
| Author:
| Kumhof, Michael
Muir, Dirk
Resende, Carlos De
Coenen, Günter
Erceg, Christopher J.
Freedman, Charles
Furceri, Davide
Lalonde, René
Laxton, Douglas
Lindé, Jesper
Mourougane, Annabelle
Mursula, Susanna |
| Series title: | IMF Working Papers |
| ISBN: | 978-1-4623-4263-1 |
| Publication Date: | Mar 2010 |
| Publisher: | International Monetary Fund
|
| Book Format: | Ebook |
| List Price: | USD $9.00 |
Book Description:
|
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...
More DescriptionThe 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.