Unconventional Fiscal Policy at the Zero Bound

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

American Economic Review, 2013, vol. 103, issue 4, 1172-1211

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.

JEL-codes: E12 E43 E52 E62 H20 (search for similar items in EconPapers)
Date: 2013
Note: DOI: 10.1257/aer.103.4.1172
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Citations: View citations in EconPapers (168)

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Related works:
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)
Working Paper: Unconventional Fiscal Policy at the Zero Bound
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