Unconventional fiscal policy at the zero bound

Isabel Correia (), Emmanuel Farhi, Juan Pablo Nicolini and Pedro Teles

No 698, Working Papers from Federal Reserve Bank of Minneapolis

Abstract: When the zero lower bound on nominal interest rates binds, monetary policy cannot provide appropriate stimulus. We show that, in the standard New Keynesian model, tax policy can deliver such stimulus at no cost and in a time-consistent manner. There is no need to use inefficient policies such as wasteful public spending or future commitments to low interest rates.

Date: 2012
New Economics Papers: this item is included in nep-mac and nep-pbe
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Citations: View citations in EconPapers (3)

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http://www.minneapolisfed.org/research/wp/wp698.pdf

Related works:
Journal Article: Unconventional Fiscal Policy at the Zero Bound (2013)
Working Paper: Unconventional Fiscal Policy at the Zero Bound (2011)
Working Paper: Unconventional Fiscal Policy at the Zero Bound (2011)
Working Paper: Unconventional Fiscal Policy at the Zero Bound (2011)
Working Paper: Unconventional Fiscal Policy at the Zero Bound
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmwp:698

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