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Title:New Keynesian versus old Keynesian government spending multipliers PDF Logo
Authors:Cogan, John F.
Cwik, Tobias J.
Taylor, John B.
Wieland, Volker
Issue Date:2009
Series/Report no.:CFS Working Paper 2009/17
Abstract:Renewed interest in fiscal policy has increased the use of quantitative models to evaluate policy. Because of modeling uncertainty, it is essential that policy evaluations be robust to alternative assumptions. We find that models currently being used in practice to evaluate fiscal policy stimulus proposals are not robust. Government spending multipliers in an alternative empirically-estimated and widely-cited new Keynesian model are much smaller than in these old Keynesian models; the estimated stimulus is extremely small with GDP and employment effects only one-sixth as large.
Subjects:Fiscal Multiplier
New Keynesian Model
Fiscal Stimulus
Government Spending
Macroeconomic Modeling
Persistent Identifier of the first edition:urn:nbn:de:hebis:30-68369
Document Type:Working Paper
Appears in Collections:CFS Working Paper Series, Universität Frankfurt a. M.

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