Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5060115 | Economics Letters | 2012 | 6 Pages |
Abstract
⺠We study a fiscal policy in a New-Keynesian model with deep habits and optimal monetary policy. ⺠The fiscal multiplier is above 1 and private consumption is crowded in. ⺠Optimized Taylor-type or price-level rules yield results close to optimal policy. ⺠Private consumption is crowded out if the Taylor rule is suboptimal. ⺠Private consumption is crowded out also if the ability to commit is absent.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Cristiano Cantore, Paul Levine, Giovanni Melina, Bo Yang,