Unconventional Fiscal Policy at the Zero Bound

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

Working Paper from Harvard University OpenScholar

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.

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http://scholar.harvard.edu/farhi/node/20945

Related works:
Journal Article: Unconventional Fiscal Policy at the Zero Bound (2013)
Working Paper: Unconventional fiscal policy at the zero bound (2012)
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)
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Persistent link: https://EconPapers.repec.org/RePEc:qsh:wpaper:20945

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