Home About Latest Browse RSS Advanced Search

Federal Reserve Bank of Atlanta
FRB Atlanta Working Paper
Small and orthodox fiscal multipliers at the zero lower bound
R. Anton Braun
Lena Mareen Korber
Yuichiro Waki
Abstract

Does fiscal policy have large and qualitatively different effects on the economy when the nominal interest rate is zero? An emerging consensus in the New Keynesian literature is that the answer is yes. New evidence provided here suggests that the answer is often no. For a broad range of empirically relevant parameterizations of the Rotemberg model of costly price adjustment, the government purchase multiplier is about one or less, and the response of hours to a tax cut is either negative or close to zero.


Download Full text
Cite this item
R. Anton Braun & Lena Mareen Korber & Yuichiro Waki, Small and orthodox fiscal multipliers at the zero lower bound, Federal Reserve Bank of Atlanta, FRB Atlanta Working Paper 2013-13, 01 Dec 2013.
More from this series
JEL Classification:
Subject headings:
Keywords: monetary policy; zero interest rate; fiscal multipliers
For corrections, contact Elaine Clokey ()
Fed-in-Print is the central catalog of publications within the Federal Reserve System. It is managed and hosted by the Economic Research Division, Federal Reserve Bank of St. Louis.

Privacy Legal