Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/284188 
Year of Publication: 
2023
Series/Report no.: 
Cardiff Economics Working Papers No. E2023/26
Publisher: 
Cardiff University, Cardiff Business School, Cardiff
Abstract: 
DSGE models based on New Keynesian principles, which have been extended to allow for banking, the zero lower bound on interest rates (ZLB), and varying price duration, can account well for recent macroeconomic behavior across a variety of economies. These models Önd that active Öscal policy can contribute to macroeconomic stability and welfare by reducing the frequency of hitting the ZLB. Fiscal policy can also share the stabilisation role with monetary policy, whose e§ectiveness under the ZLB is much reduced.
Subjects: 
Moments
fiscal policy
zero bound
monetary policy
DSGE model
macro stability
indirect inference
JEL: 
E17
E31
E32
E42
E52
E62
Document Type: 
Working Paper

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