Arbeitspapier
Fiscal Shocks and Real Rigidities
In this paper we show that empirically plausible results on the effects of fiscal shocks in Galí, López-Salido and Vallés (2007) rely on a high degree of price stickiness and a large percentage of financially constrained agents. Real rigidities in the form of habit persistence, fixed firm-specific capital and Kimball demand curves interact in interesting ways with nominal and financial rigidities and allow us to reproduce the same consumption multiplier as Galí et al. (2007) under only two and a half quarters of price stickiness, instead of four, and only 30 per cent of constrained agents instead of 50 percent. Therefore, real rigidities are useful in the study of fiscal shocks in addition to monetary and productivity shocks as has been shown in the previous literature.
- ISBN
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978-82-7553-444-4
- Language
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Englisch
- Bibliographic citation
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Series: Working Paper ; No. 2008/10
- Classification
-
Wirtschaft
Business Fluctuations; Cycles
Fiscal Policy
- Subject
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Kimball demand curves
rule-of-thumb consumers
fiscal shocks
nominal rigidities
real rigidities
firm-specific capital
habit persistence
- Event
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Geistige Schöpfung
- (who)
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Furlanetto, Francesco
Seneca, Martin
- Event
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Veröffentlichung
- (who)
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Norges Bank
- (where)
-
Oslo
- (when)
-
2008
- Handle
- Last update
-
10.03.2025, 11:41 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Furlanetto, Francesco
- Seneca, Martin
- Norges Bank
Time of origin
- 2008
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