New Keynesian versus old Keynesian government spending multipliers

Renewed interest in fiscal policy has increased the use of quantitative models to evaluate policy. Because of modeling uncertainty, it is essential that policy evaluations be robust to alternative assumptions. We find th
Renewed interest in fiscal policy has increased the use of quantitative models to evaluate policy. Because of modeling uncertainty, it is essential that policy evaluations be robust to alternative assumptions. We find that models currently being used in practice to evaluate fiscal policy stimulus proposals are not robust. Government spending multipliers in an alternative empirically-estimated and widely-cited new Keynesian model are much smaller than in these old Keynesian models; the estimated stimulus is extremely small with GDP and employment effects only one-sixth as large. Keywords: Fiscal Multiplier, New Keynesian Model, Fiscal Stimulus, Government Spending, Macroeconomic Modeling.
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Metadaten
Author:John F. Cogan, Tobias J. Cwik, John B. Taylor, Volker Wieland
URN:urn:nbn:de:hebis:30-68369
Parent Title (German):CFS working paper series ; 2009, 17
Series (Serial Number):CFS working paper series (2009, 17)
Document Type:Working Paper
Language:English
Date of Publication (online):2009/09/01
Year of first Publication:2009
Publishing Institution:Univ.-Bibliothek Frankfurt am Main
Release Date:2009/09/01
Tag:Fiscal Multiplier ; Fiscal Stimulus ; Government Spending ; Macroeconomic Modeling; New Keynesian Model
HeBIS PPN:215701321
Institutes:Wirtschaftswissenschaften
Institute for Monetary and Financial Stability (IMFS)
Center for Financial Studies (CFS)
CCS-Classification:C.5.2 Minicomputers**
Dewey Decimal Classification:330 Wirtschaft
JEL-Classification:C52 Model Evaluation and Selection
E62 Fiscal Policy
Sammlungen:Universitätspublikationen
Licence (German):License Logo Veröffentlichungsvertrag für Publikationen

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