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Center for Financial Studies (CFS), Universität Frankfurt a. M. >
CFS Working Paper Series, Universität Frankfurt a. M. >
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http://hdl.handle.net/10419/43215
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| Title: | | Fiscal stimulus and the promise of future spending cuts: A comment  |
| Authors: | | Wieland, Volker |
| Issue Date: | | 2009 |
| Series/Report no.: | | CFS Working Paper 2009/26 |
| Abstract: | | 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. |
| Subjects: | | Fiscal Multiplier Fiscal Stimulus Discretionary Fiscal Policy New Keynesian Model Crowding-out Government Spending Macroeconomic Modelling |
| JEL: | | C32 G14 G17 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CFS Working Paper Series, Universität Frankfurt a. M.
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