Fiscal stimulus and the promise of future spending cuts : a comment

Recent evaluations of the fiscal stimulus packages recently enacted in the United States and Europe such as Cogan, Cwik, Taylor and Wieland (2009) and Cwik and Wieland (2009) suggest that the GDP effects will be modest d
Recent evaluations of the fiscal stimulus packages recently enacted in the United States and Europe such as Cogan, Cwik, Taylor and Wieland (2009) and Cwik and Wieland (2009) suggest that the GDP effects will be modest due to crowding-out of private consumption and investment. Corsetti, Meier and Mueller (2009a,b) argue that spending shocks are typically followed by consolidations with substantive spending cuts, which enhance the short-run stimulus effect. This note investigates the implications of this argument for the estimated impact of recent stimulus packages and the case for discretionary fiscal policy. JEL-Classifications: C32, G14, G17 Keywords: Fiscal Multiplier, Fiscal Stimulus, Discretionary Fiscal Policy, New Keynesian Model, Crowding-out, Government Spending, Macroeconomic Modelling.
show moreshow less

Download full text files

Export metadata

  • Export Bibtex
  • Export RIS

Additional Services

    Share in Twitter Search Google Scholar
Metadaten
Author:Volker Wieland
URN:urn:nbn:de:hebis:30-72751
Series (Serial Number):CFS working paper series (2009, 26)
Document Type:Working Paper
Language:English
Date of Publication (online):2009/12/02
Year of first Publication:2009
Publishing Institution:Univ.-Bibliothek Frankfurt am Main
Release Date:2009/12/02
Tag:Crowding-out ; Discretionary Fiscal Policy ; Fiscal Multiplier ; Fiscal Stimulus ; Government Spending ; Macroeconomic Modelling; New Keynesian Model
HeBIS PPN:22022966X
Institutes:Wirtschaftswissenschaften
Center for Financial Studies (CFS)
Dewey Decimal Classification:330 Wirtschaft
Sammlungen:Universitätspublikationen
Licence (German):License Logo Veröffentlichungsvertrag für Publikationen

$Rev: 11761 $