New Keynesian versus old Keynesian government spending multipliers
Renewed interest in fiscal policy has increased the use of quantitative models to evaluate policy. Because of modeling uncertainty, it is essential that policy evaluations be robust to alternative assumptions. We find that models currently being used in practice to evaluate fiscal policy stimulus proposals are not robust. Government spending multipliers in an alternative empirically-estimated and widely-cited new Keynesian model are much smaller than in these old Keynesian models; the estimated stimulus is extremely small with GDP and employment effects only one-sixth as large. JEL-Classifications: C52, E62 Keywords: Fiscal Multiplier, New Keynesian Model, Fiscal Stimulus, Government Spending, Macroeconomic Modeling.
| Author: | John F. Cogan, Tobias J. Cwik, John B. Taylor, Volker Wieland |
|---|---|
| URN: | urn:nbn:de:hebis:30-68369 |
| Series (Serial Number) | CFS working paper series (2009, 17) |
| Document Type: | Working Paper |
| Language: | English |
| Date of Publication (online): | 01.09.2009 |
| Year of first Publication: | 2009 |
| Publishing Institution: | Univ.-Bibliothek Frankfurt am Main |
| Tag: | Fiscal Multiplier ; Fiscal Stimulus ; Government Spending ; Macroeconomic Modeling; New Keynesian Model |
| HeBIS PPN: | 215701321 |
| Institutes: | Wirtschaftswissenschaften |
| Center for Financial Studies (CFS) | |
| Institute for Monetary and Financial Stability | |
| CCS-Classification: | C.5.2 Minicomputers** |
| Dewey Decimal Classification: | 330 Wirtschaft |
| Sammlungen: | Universitätspublikationen |
| Licence (German): |  Veröffentlichungsvertrag für Publikationen ohne Print on Demand |
