UID:
edocfu_9958108309802883
Format:
1 online resource (41 p.)
Edition:
1st ed.
ISBN:
1-4623-2954-3
,
1-4527-8336-5
,
9786612843211
,
1-282-84321-4
,
1-4518-7253-4
Series Statement:
IMF working paper ; WP/09/106
Content:
The impact of fiscal stimulus depends not only on short-term tax and spending policies, but also on expectations about offsetting measures in the future. This paper analyzes the effects of an increase in government spending under a plausible debt-stabilizing policy that links current stimulus to a subsequent period of spending restraint. Accounting for such spending reversals brings an otherwise standard new Keynesian model in line with the stylized facts of fiscal transmission, including the crowding-in of consumption and the 'puzzle' of real exchange rate depreciation. Time series evidence for the U.S. supports the empirical relevance of spending reversals.
Note:
Description based upon print version of record.
,
Contents; I. Introduction; II. Model; A. Final Good Firms; B. Intermediate Good Firms; C. Households; D. Government; E. Equilibrium; III. Fiscal Policy Transmission with Spending Reversals; A. Parameterization; Tables; 1. Parameterization of the Model; B. Quantitative Analysis; Figures; 1. Effect of Government Spending Shocks: Sticky Price vs. Flexible Price Allocation; 2. Effect of Government Spending Shocks: Debt-Stabilizing vs. Debt- Insensitive Spending Rule; 3. Effect of Government Spending Shocks: Model with Limited Participation in Asset Markets; IV. Time Series Evidence
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A. VAR SpecificationB. Results; 4. Fiscal Policy Transmission According to VAR Model: Effects of VAR Shock; 5. Fiscal Policy Transmission According to VAR Model: Effects of Military Event; V. Conclusion; References; Appendices; I. More Simulation Results; Appendix Figures; A.1. Effect of Government Spending Shocks: Debt-Stabilizing vs. Debt- Insensitive Government Spending under Complete Markets; A.2. Effects of Government Spending Shocks: High Debt Elasticity of Interest Rates vs. Baseline; II. Data; III. Sensitivity Analysis of VAR Results
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A.3. Fiscal Policy Transmission According to VAR Model: Effects of VAR Shock. Sensitivity AnalysisA.4. Fiscal Policy Transmission According to VAR Model: Effects of Military Event. Sensitivity Analysis; A.5. Fiscal Policy Transmission According to VAR Model: Effects of VAR Shock in Nominal VAR; A.6. Fiscal Policy Transmission According to VAR Model: Effects of Military Event in Nominal VAR
,
English
Additional Edition:
ISBN 1-4519-1683-3
Language:
English
