The Aggregate and Distributional Effects of Fiscal Stimuli

Paweł Kopiec ()

No 2022-070, KAE Working Papers from Warsaw School of Economics, Collegium of Economic Analysis

Abstract: This paper compares the aggregate and distributional effects of three fiscal policy instruments: government expenditures, unemployment benefits and transfers. To this end, the Diamond-Mortensen-Pissarides model of frictional labor market is embedded into an otherwise standard Heterogeneous Agent New Keynesian framework. The model calibrated to match the moments characterizing the US economy successfully replicates the empirical distributions of households across: disposable income, consumption expenditures and net worth. The solution method developed by Reiter (2009) is applied to quantify the aggregate and distributional responses to changes in the analyzed fiscal measures. Moreover, the stabilizing role of government expenditures, unemployment benefits and transfers is assessed.

Keywords: Heterogeneous Agents; Frictional Markets; Fiscal Stimulus (search for similar items in EconPapers)
JEL-codes: D30 E62 H23 H30 H31 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2022-01
New Economics Papers: this item is included in nep-dge and nep-mac
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http://hdl.handle.net/20.500.12182/1127 (application/pdf)

Related works:
Journal Article: The aggregate and distributional effects of fiscal stimuli (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:sgh:kaewps:2022070

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