Arbeitspapier
The government spending multiplier, fiscal stress and the zero lower bound
The recent sovereign debt crisis in the Eurozone was characterized by a monetary policy, which has been constrained by the zero lower bound (ZLB) on nominal interest rates, and several countries, which faced high risk spreads on their sovereign bonds. How is the government spending multiplier affected by such an economic environment? While prominent results in the academic literature point to high government spending multipliers at the ZLB, higher public indebtedness is often associated with small government spending multipliers. I develop a DSGE model with leverage constrained banks that captures both features of this economic environment, the ZLB and fiscal stress. In this model, I analyze the effects of government spending shocks. I find that not only are multipliers large at the ZLB, the presence of fiscal stress can even increase their size. For longer durations of the ZLB, multipliers in this model can be considerably larger than one.
- Sprache
-
Englisch
- Erschienen in
-
Series: IMFS Working Paper Series ; No. 126
- Klassifikation
-
Wirtschaft
Business Fluctuations; Cycles
Financial Markets and the Macroeconomy
Fiscal Policy
- Thema
-
Government spending multiplier
Fiscal stress
Zero lower bound
Financial frictions
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Strobel, Felix
- Ereignis
-
Veröffentlichung
- (wer)
-
Goethe University Frankfurt, Institute for Monetary and Financial Stability (IMFS)
- (wo)
-
Frankfurt a. M.
- (wann)
-
2018
- Handle
- URN
-
urn:nbn:de:hebis:30:3-488019
- Letzte Aktualisierung
-
10.03.2025, 11:45 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Strobel, Felix
- Goethe University Frankfurt, Institute for Monetary and Financial Stability (IMFS)
Entstanden
- 2018
Ähnliche Objekte (12)
The government spending multiplier, fiscal stress, and the zero lower bound
The government spending multiplier, fiscal stress and the zero lower bound
The composition of government spending and the multiplier at the Zero Lower Bound
The composition of government spending and the multiplier at the Zero Lower Bound
The government spending multiplier at the zero lower bound: Evidence from the United States
The Government Spending Multiplier at the Zero Lower Bound: International Evidence from Historical Data
Natural Disasters, Government Spending, and the Fiscal Multiplier
Fiscal Policy at the Zero Lower Bound
Meta-analysis: Fiscal multiplier
Biases in fiscal multiplier estimates
Biases in fiscal multiplier estimates
Biases in fiscal multiplier estimates
The government spending multiplier, fiscal stress, and the zero lower bound
The government spending multiplier, fiscal stress and the zero lower bound
The composition of government spending and the multiplier at the Zero Lower Bound
The composition of government spending and the multiplier at the Zero Lower Bound
The government spending multiplier at the zero lower bound: Evidence from the United States
The Government Spending Multiplier at the Zero Lower Bound: International Evidence from Historical Data
Natural Disasters, Government Spending, and the Fiscal Multiplier
Fiscal Policy at the Zero Lower Bound
Meta-analysis: Fiscal multiplier
Biases in fiscal multiplier estimates
Biases in fiscal multiplier estimates
Biases in fiscal multiplier estimates
The government spending multiplier, fiscal stress, and the zero lower bound
The government spending multiplier, fiscal stress and the zero lower bound
The composition of government spending and the multiplier at the Zero Lower Bound
The composition of government spending and the multiplier at the Zero Lower Bound
The government spending multiplier at the zero lower bound: Evidence from the United States
The Government Spending Multiplier at the Zero Lower Bound: International Evidence from Historical Data
Natural Disasters, Government Spending, and the Fiscal Multiplier
Fiscal Policy at the Zero Lower Bound
Meta-analysis: Fiscal multiplier
Biases in fiscal multiplier estimates
Biases in fiscal multiplier estimates