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 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.

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Metadaten
Author:Volker WielandORCiDGND
URN:urn:nbn:de:hebis:30-72751
Parent Title (German):Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2009,26
Series (Serial Number):CFS working paper series (2009, 26)
Document Type:Working Paper
Language:English
Year of Completion:2009
Year of first Publication:2009
Publishing Institution:Universit├Ątsbibliothek Johann Christian Senckenberg
Release Date:2009/12/02
Tag:Crowding-out; Discretionary Fiscal Policy; Fiscal Multiplier; Fiscal Stimulus; Government Spending; Macroeconomic Modelling; New Keynesian Model
GND Keyword:Internationaler Kreditmarkt; Stabilisierung; Fiskalpolitik
Issue:November 2009
Page Number:18
HeBIS-PPN:22022966X
Institutes:Wirtschaftswissenschaften / Wirtschaftswissenschaften
Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
JEL-Classification:C Mathematical and Quantitative Methods / C3 Multiple or Simultaneous Equation Models / C32 Time-Series Models; Dynamic Quantile Regressions (Updated!)
Licence (German):License LogoDeutsches Urheberrecht