Bitte verwenden Sie diesen Link, um diese Publikation zu zitieren, oder auf sie als Internetquelle zu verweisen: http://hdl.handle.net/10419/173158
Autoren: 
Lustenhouwer, Joep
Mavromatis, Kostas
Datum: 
2017
Reihe/Nr.: 
BERG Working Paper Series 130
Zusammenfassung: 
We analyze fiscal consolidations using a New-Keynesian model where agents have finite planning horizons and are uncertain about the future state of the economy. Both consumers and firms are infinitely lived, but only plan and form expectations up to a finite number of periods into the future. The length of agents' planning horizons plays an important role in determining how spending cuts or tax increases affect output and inflation. We find that for low degrees of relative risk aversion spending-based consolidations are less costly in terms of output losses, in line with empirical evidence. A stronger response of monetary policy to inflation makes spending-based consolidations more favorable as well. Interestingly, for short planning horizons, our model captures the positive comovement between private consumption and government spending observed in the data.
Schlagwörter: 
Fiscal policy
Finite planning horizons
Bounded rationality
JEL: 
E60
E62
E63
H63
ISBN: 
978-3-943153-51-4
Dokumentart: 
Working Paper

Datei(en):
Datei
Größe
679.85 kB





Publikationen in EconStor sind urheberrechtlich geschützt.