Fiscal multipliers in bad times: does the nature of a recession matter?
Autor(a) principal: | |
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Data de Publicação: | 2018 |
Outros Autores: | |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Institucional do FGV (FGV Repositório Digital) |
Texto Completo: | http://hdl.handle.net/10438/24926 |
Resumo: | The literature measuring the magnitude of the fiscal multiplier has a considerable consensus that the stimulative effects of fiscal instruments depends on the current state of economic activity, whether it is expanding or facing a recession. However, none of the previous works studied how the nature of an economic downturn, if the economy is facing an adverse supply/demand shock, affects the effectiveness of fiscal expansions. We introduce in a simple New Keynesian model with a rich description of fiscal policy, the assumption of imperfectly informed policymakers (fiscal and monetary) to approach the question. Our results point out the existence of disparate effects of fiscal policy depending on whether the economy is facing a demand or a supply recession. Yet, we find out that cuts in taxes are an effective tool to counter the effects of adverse shocks on economic activity and aggregate consumption. |
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Borsoi, Nicolas da SilvaTeles, Vladimir KuhlEscolas::EESP2018-10-25T13:38:08Z2018-10-25T13:38:08Z2018-10TD 492http://hdl.handle.net/10438/24926The literature measuring the magnitude of the fiscal multiplier has a considerable consensus that the stimulative effects of fiscal instruments depends on the current state of economic activity, whether it is expanding or facing a recession. However, none of the previous works studied how the nature of an economic downturn, if the economy is facing an adverse supply/demand shock, affects the effectiveness of fiscal expansions. We introduce in a simple New Keynesian model with a rich description of fiscal policy, the assumption of imperfectly informed policymakers (fiscal and monetary) to approach the question. Our results point out the existence of disparate effects of fiscal policy depending on whether the economy is facing a demand or a supply recession. Yet, we find out that cuts in taxes are an effective tool to counter the effects of adverse shocks on economic activity and aggregate consumption.engFGV EESP - Textos para Discussão; TD 492Fiscal policyFiscal multipliersRecessionEconomiaPolítica tributáriaMultiplicador (Economia)Oferta e procuraRecessão (Economia)Fiscal multipliers in bad times: does the nature of a recession matter?info:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleinfo:eu-repo/semantics/openAccessreponame:Repositório Institucional do FGV (FGV Repositório Digital)instname:Fundação Getulio Vargas (FGV)instacron:FGVTEXTTD 492 - Borsoi_Teles.pdf.txtTD 492 - Borsoi_Teles.pdf.txtExtracted texttext/plain61868https://repositorio.fgv.br/bitstreams/e0d3aa31-ce70-4522-88fd-5622bd97d0f5/downloadfd1673ed15790a192160563c2c280b6dMD55ORIGINALTD 492 - Borsoi_Teles.pdfTD 492 - 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dc.title.eng.fl_str_mv |
Fiscal multipliers in bad times: does the nature of a recession matter? |
title |
Fiscal multipliers in bad times: does the nature of a recession matter? |
spellingShingle |
Fiscal multipliers in bad times: does the nature of a recession matter? Borsoi, Nicolas da Silva Fiscal policy Fiscal multipliers Recession Economia Política tributária Multiplicador (Economia) Oferta e procura Recessão (Economia) |
title_short |
Fiscal multipliers in bad times: does the nature of a recession matter? |
title_full |
Fiscal multipliers in bad times: does the nature of a recession matter? |
title_fullStr |
Fiscal multipliers in bad times: does the nature of a recession matter? |
title_full_unstemmed |
Fiscal multipliers in bad times: does the nature of a recession matter? |
title_sort |
Fiscal multipliers in bad times: does the nature of a recession matter? |
author |
Borsoi, Nicolas da Silva |
author_facet |
Borsoi, Nicolas da Silva Teles, Vladimir Kuhl |
author_role |
author |
author2 |
Teles, Vladimir Kuhl |
author2_role |
author |
dc.contributor.unidadefgv.por.fl_str_mv |
Escolas::EESP |
dc.contributor.author.fl_str_mv |
Borsoi, Nicolas da Silva Teles, Vladimir Kuhl |
dc.subject.eng.fl_str_mv |
Fiscal policy Fiscal multipliers Recession |
topic |
Fiscal policy Fiscal multipliers Recession Economia Política tributária Multiplicador (Economia) Oferta e procura Recessão (Economia) |
dc.subject.area.por.fl_str_mv |
Economia |
dc.subject.bibliodata.por.fl_str_mv |
Política tributária Multiplicador (Economia) Oferta e procura Recessão (Economia) |
description |
The literature measuring the magnitude of the fiscal multiplier has a considerable consensus that the stimulative effects of fiscal instruments depends on the current state of economic activity, whether it is expanding or facing a recession. However, none of the previous works studied how the nature of an economic downturn, if the economy is facing an adverse supply/demand shock, affects the effectiveness of fiscal expansions. We introduce in a simple New Keynesian model with a rich description of fiscal policy, the assumption of imperfectly informed policymakers (fiscal and monetary) to approach the question. Our results point out the existence of disparate effects of fiscal policy depending on whether the economy is facing a demand or a supply recession. Yet, we find out that cuts in taxes are an effective tool to counter the effects of adverse shocks on economic activity and aggregate consumption. |
publishDate |
2018 |
dc.date.accessioned.fl_str_mv |
2018-10-25T13:38:08Z |
dc.date.available.fl_str_mv |
2018-10-25T13:38:08Z |
dc.date.issued.fl_str_mv |
2018-10 |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
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article |
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dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10438/24926 |
dc.identifier.sici.none.fl_str_mv |
TD 492 |
identifier_str_mv |
TD 492 |
url |
http://hdl.handle.net/10438/24926 |
dc.language.iso.fl_str_mv |
eng |
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eng |
dc.relation.ispartofseries.none.fl_str_mv |
FGV EESP - Textos para Discussão; TD 492 |
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info:eu-repo/semantics/openAccess |
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openAccess |
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