Fiscal policy, pricing frictions and monetary accommodation


Autoria(s): Canova, Fabio; Pappa, Evi
Contribuinte(s)

Universitat Pompeu Fabra. Departament d'Economia i Empresa

Data(s)

26/11/2012

Resumo

We investigate the theoretical conditions for effectiveness of government consumptionexpenditure expansions using US, Euro area and UK data. Fiscal expansions taking placewhen monetary policy is accommodative lead to large output multipliers in normal times.The 2009-2010 packages need not produce significant output multipliers, may havemoderate debt effects, and only generate temporary inflation. Expenditure expansionsaccompanied by deficit/debt consolidations schemes may lead to short run output gains buttheir success depends on how monetary policy and expectations behave. Trade opennessand the cyclicality of the labor wedge explain cross-country differences in the magnitude ofthe multipliers.

Identificador

http://hdl.handle.net/10230/19884

Idioma(s)

eng

Direitos

L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons

info:eu-repo/semantics/openAccess

<a href="http://creativecommons.org/licenses/by-nc-nd/3.0/es/">http://creativecommons.org/licenses/by-nc-nd/3.0/es/</a>

Palavras-Chave #Macroeconomics and International Economics #government consumption expenditure shocks; pricing frictions; monetary policy accommodation; debt and inflation dynamics
Tipo

info:eu-repo/semantics/workingPaper