| Description |
1 online resource (31 pages) : color illustrations |
| Series |
IMF working paper, 1018-5941 ; WP/15/52 |
|
IMF working paper ; WP/15/52.
|
| Contents |
Cover; Contents; I. Introduction; II. A Model of Delayed Fiscal Consolidation; III. Constant Fiscal Multipliers; List of Figures; Figure 1: Interest rate threshold with constant multipliers and full closing of the output gap; Figure 2: Interest rate threshold with constant multipliers and no closing of the output gap; Figure 3: Interest rate threshold in a model à la DeLong and Summers; IV. Time-Varying Multipliers: Simulations for the G7; Figure 4: Increase in GDP from a fiscal stimulus of 1 percent of GDP; A. Simulation Assumptions; List of Tables |
|
Table 1: Calibration of Simulation ParametersFigure 5: Alternative Assumptions about Fiscal Multipliers; B. Simulation Results; Figure 6: Alternative Fiscal Paths; Figure 7: Implications of Alternative Fiscal Paths for Actual and Potential GDP; Figure 8: Sensitivity of the Simulation Results to Output Gap Persistence and Hysteresis; Figure 9: Effects of Different Fiscal Paths under Discontinuous Multipliers; V. Other Considerations; Appendix A; References |
| Summary |
We develop a simple model to examine the conditions under which delaying fiscal consolidation can affect the present value of GDP via the fiscal stance's effects on the output gap and hysteresis. We find that the absolute size of the fiscal multiplier---the focus of much empirical investigation and policy debate---is likely inconsequential in this regard. Rather, what matters is the degree to which the multiplier during the initial period of fiscal stimulus differs from the multiplier when the stimulus is withdrawn. If the multiplier is constant over time, delaying consolidation is unlikely to significantly boost the present value of GDP via effects on the output gap and hysteresis. The potential success of such efforts relies instead on exploiting time-variation in multipliers.--Abstract |
| Notes |
"March 2015." |
|
"European Department." |
| Bibliography |
Includes bibliographical references (pages 30-31) |
| Notes |
Online resource; title from pdf title page (IMF.org Web site, viewed March 6, 2015) |
| Subject |
Fiscal policy -- Econometric models
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Hysteresis (Economics) -- Econometric models
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Gross domestic product -- Econometric models
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Expenditures, Public -- Econometric models
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Expenditures, Public -- Econometric models
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Fiscal policy -- Econometric models
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Gross domestic product -- Econometric models
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| Form |
Electronic book
|
| Author |
Sandri, Damiano.
|
|
International Monetary Fund. European Department.
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| ISBN |
1498393578 |
|
9781498393577 |
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