Is stimulative fiscal policy more effective at the zero lower bound?

Renee Courtois Haltom and Pierre Daniel Sarte

Richmond Fed Economic Brief, 2011, issue Aug, No 11-8

Abstract: Several recent research efforts have found that stimulative fiscal policy ? government spending or tax cuts ? can have unusual effects when nominal interest rates are as low as they are today. In particular, some studies have found that the government spending "multiplier" can be much larger at the zero lower bound. Despite these results, some caution is due when interpreting the size of the fiscal multiplier.

Keywords: Business cycles; Economic growth; Monetary policy; Fiscal policy (search for similar items in EconPapers)
Date: 2011
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