Fiscal policy and business cycle characteristics in a heterogeneous agent macro model
Journal of Economic Behavior & Organization, 2013, vol. 92, issue C, 224-240
This paper explores the macroeconomic implications of changing fiscal policy in a Heterogeneous Interacting Agent (“HIA”) model. The key contributions to the existing HIA complex adaptive trivial system (“CATS”) literature include the addition of a progressive income tax structure, an expanded role for redistribution, and a stylized reactive government sector. In certain specifications deficit financed tax cuts are shown to effectively shorten recessions, while deficit financed spending stimulus is able to lengthen recoveries. Alternative specifications provide ambiguous support for generalizing the effectiveness of these policy treatments. Robustness checks support the general findings that increased redistribution towards the unemployed results in higher unemployment rates, greater inequality, and shorter contractions.
Keywords: Agent-based computational models; Fiscal policy; Business cycles; CATS models (search for similar items in EconPapers)
JEL-codes: C63 E62 E37 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:eee:jeborg:v:92:y:2013:i:c:p:224-240
Access Statistics for this article
Journal of Economic Behavior & Organization is currently edited by Neilson, William Stuart
More articles in Journal of Economic Behavior & Organization from Elsevier
Series data maintained by Dana Niculescu ().