Is a Money-financed Fiscal Stimulus Desirable?

Chiara Punzo and Lorenza Rossi

Working papers from Banque de France

Abstract: We analyse the redistribution channel of a money-financed versus debt-financed fiscal stimulus in a Borrower-Saver frammework. The redistribution channel is larger when we consider a money-financed fiscal stimulus. However, it generates also larger welfare losses than a debt-financed fiscal stimulus, particularly in a borrower-saver framework due to the additional presence of the consumption gap with respect to a representative agent model.

Keywords: Borrowers-Savers; Fiscal Stimuli; Welfare; Fiscal Multipliers (search for similar items in EconPapers)
JEL-codes: E3 E5 E62 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2021
New Economics Papers: this item is included in nep-isf and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:818

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