The Effects of a Money-Financed Fiscal Stimulus
Copyright policy )The Effects of a Money-Financed Fiscal Stimulus
I analyze the effects of a money-financed fiscal stimulus and compare them with those resulting from a conventional debt-financed stimulus. I study the effects of both a tax cut and an increase in government purchases, with and without a binding zero lower bound (ZLB) on the nominal interest rate. When the ZLB is not binding, a money-financed fiscal stimulus is shown to have much larger multipliers than a debt-financed fiscal stimulus. That difference in effectiveness persists, but is much smaller, under a binding ZLB. Nominal rigidities are shown to play a major role in shaping those effects.
Funding from CERCA Programme/Generalitat de Catalunya and the Barcelona GSE through a Severo Ochoa grant is gratefully acknowledged.
- Universitat Pompeu Fabra Spain
Fiscal multipliers, Government spending, fiscal multiplier, seignorage, government spending, fiscal multiplier, helicopter drop., Seignorage, government spending, seignorage; government spending; fiscal multipliers; helicopter drop, Helicopter drop, Macroeconomics and International Economics, seignorage, fiscal multiplier; government spending; seignorage, jel: jel:E62, jel: jel:E32, jel: jel:E52
Fiscal multipliers, Government spending, fiscal multiplier, seignorage, government spending, fiscal multiplier, helicopter drop., Seignorage, government spending, seignorage; government spending; fiscal multipliers; helicopter drop, Helicopter drop, Macroeconomics and International Economics, seignorage, fiscal multiplier; government spending; seignorage, jel: jel:E62, jel: jel:E32, jel: jel:E52
selected citations These citations are derived from selected sources.This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).91 popularity This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.Top 1% influence This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).Top 10% impulse This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.Top 1%
Citations provided by BIP!Popularity provided by BIP!