Government Spending Multipliers under the Zero Lower Bound: Evidence from Japan

Wataru Miyamoto, Thuy Lan Nguyen and Dmitriy Sergeyev

American Economic Journal: Macroeconomics, 2018, vol. 10, issue 3, 247-77

Abstract: Using a rich dataset on government spending forecasts in Japan, we provide new evidence on the effects of unexpected changes in government spending when the nominal interest rate is near the zero lower bound (ZLB). The on-impact output multiplier is 1.5 in the ZLB period and 0.6 outside of it. We estimate that government spending shocks increase both private consumption and investment during the ZLB period, but crowd them out in the normal period. There is evidence that expected inflation increases more in the ZLB period than in the normal period.

JEL-codes: E21 E22 E23 E31 E43 E52 E62 (search for similar items in EconPapers)
Date: 2018
Note: DOI: 10.1257/mac.20170131
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Citations: View citations in EconPapers (106)

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Related works:
Working Paper: Government Spending Multipliers Under the Zero Lower Bound: Evidence from Japan (2017)
Working Paper: Government Spending Multipliers under the Zero Lower Bound: Evidence from Japan (2016)
Working Paper: Government Spending Multipliers under the Zero Lower Bound: Evidence from Japan (2016)
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