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Title:Fiscal stimulus and the promise of future spending cuts: A comment PDF Logo
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
Persistent Identifier of the first edition:urn:nbn:de:hebis:30-72751
Document Type:Working Paper
Appears in Collections:CFS Working Paper Series, Universität Frankfurt a. M.

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