Should the Fiscal Authority Avoid Implementation Lag?

Masataka Eguchi, Hidekazu Niwa and Takayuki Tsuruga

ISER Discussion Paper from Institute of Social and Economic Research, The University of Osaka

Abstract: Implementation lags are a concern of policymakers as they may reduce the efficacy of fiscal policy. Using a standard New Keynesian model with an effective lower bound on the nominal interest rate, we compare the impacts of fiscal stimulus on output across various lengths of implementation lag. We show that despite concerns among policymakers, implementation lags may enhance the efficacy of government purchases on output when the economy is caught in a liquidity trap.

Date: 2022-11, Revised 2024-01
New Economics Papers: this item is included in nep-dge
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https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2022/DP1196R.pdf

Related works:
Journal Article: Should the Fiscal Authority Avoid Implementation Lag? (2024)
Working Paper: Should the Fiscal Authority Avoid Implementation Lag? (2024)
Working Paper: Should the Fiscal Authority Avoid Implementation Lag? (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:dpr:wpaper:1196r

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