Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/153688
Authors: 
Gomes, Sandra
Jacquinot, Pascal
Mestre, Ricardo
Sousa, João
Year of Publication: 
2010
Series/Report no.: 
ECB Working Paper 1254
Abstract: 
The purpose of this paper is to analyse whether fiscal policies can alleviate the effects of the zero lower bound (ZLB) on interest rates and if they should be coordinated internationally. The analysis is carried out using EAGLE, a DSGE model of the global economy. We consider that the fiscal shocks are temporary and that fiscal policy retains full credibility at all times. In this setup we find significant non-linearities in a ZLB situation that amplify the effects of fiscal shocks compared to the non-ZLB case. International coordination is helpful but does not play a major role in the results.
Subjects: 
DSGE Models
Fiscal Moultipliers
monetary policy
zero lower bound
JEL: 
E40
E62
E63
F42
Document Type: 
Working Paper

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