Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/76749
Authors: 
Canzoneri, Matthew
Collard, Fabrice
Dellas, Harris
Diba, Behzad
Year of Publication: 
2012
Series/Report no.: 
Discussion Papers, Department of Economics, Universität Bern 12-04
Abstract: 
The Great Recession, and the fiscal response to it, has revived interest in the size of fiscal multipliers. Standard business cycle models have difficulties generating multipliers greater than one. And they also fail to produce any significant asymmetry in the size of the multipliers over the business cycle. In this paper we employ a variant of the Curdia-Woodford model of costly financial intermediation to show that fiscal multipliers are strongly countercyclical. In particular, they can take values exceeding two during recessions, declining to values below one during expansions.
Subjects: 
Government Spending Multipliers
Cyclicality
Financial Frictions
JEL: 
E32
E62
H3
Document Type: 
Working Paper

Files in This Item:
File
Size
485.17 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.