|
EconStor >
Julius-Maximilians-Universität Würzburg >
Lehrstuhl für Volkswirtschaftslehre, Geldund internationale Wirtschaftsbeziehungen, Universität Würzburg >
W.E.P. - Würzburg Economic Papers, Lst. f. VWL, Geld u. internat. Wirtschaftsbeziehungen, Universität Würzburg >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/55840
|
| | |
| Title: | | Government debt, inflation dynamics and the transmission of fiscal policy shocks  |
| Authors: | | Mayer, Eric Rüth, Sebastian Scharler, Johann |
| Issue Date: | | 2012 |
| Series/Report no.: | | Würzburg economic papers 87 |
| Abstract: | | We analyze the influence of the fiscal position on the transmission of government spending shocks in a New Keynesian model. We find that once we allow for positive levels of government debt in the steady state, the sign and the size of the fiscal multiplier depend strongly on the horizon at which the multiplier is evaluated. While the long-run effect of a fiscal policy innovation is typically of a similar order of magnitude as in Gali et al. (2007), short-run multipliers differ substantially. The reason for this non-monotonic behavior is the interaction between the dynamics of the inflation rate and the debt level in real terms, which is absent in standard models in which government debt is restricted to be equal to zero in the steady state. |
| Subjects: | | fiscal multiplier New Keynesian model government debt inflation |
| JEL: | | E31 E62 H63 |
| Document Type: | | Working Paper |
| Appears in Collections: | | W.E.P. - Würzburg Economic Papers, Lst. f. VWL, Geld u. internat. Wirtschaftsbeziehungen, Universität Würzburg
|
| |
| | |
Download bibliographical data as:
BibTeX
|
| |
Share on:http://hdl.handle.net/10419/55840
|
Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.
|