首页 | 本学科首页   官方微博 | 高级检索  
     检索      


Fiscal Multipliers at the Zero Lower Bound: The Role of Policy Inertia
Authors:TIMOTHY S HILLS  TAISUKE NAKATA
Abstract:The presence of the lagged shadow policy rate in the interest rate feedback rule reduces the government spending multiplier nontrivially when the policy rate is constrained at the zero lower bound (ZLB). In the economy with policy inertia, increased inflation and output due to higher government spending during a recession speed up the return of the policy rate to the steady state after the recession ends, which in turn damps the expansionary effects of the government spending during the recession via expectations. In our baseline experiment intended to capture the effectiveness of the American Recovery and Reinvestment Act of 2009, the output multiplier at the ZLB is 1.9 when the weight on the lagged shadow rate is zero, and 0.5 when the weight is 0.85.
Keywords:E32  E52  E61  E62  E63  fiscal policy  government spending multipliers  interest rate smoothing  liquidity trap  zero lower bound
设为首页 | 免责声明 | 关于勤云 | 加入收藏

Copyright©北京勤云科技发展有限公司  京ICP备09084417号