Household Debt and Fiscal Multipliers

Javier Andrés (), José Boscá and Javier Ferri

Economica, 2015, vol. 82, 1048-1081

Abstract: type="main" xml:id="ecca12161-abs-0001">

We study the size of government spending multipliers in a general equilibrium model with search and matching frictions in which we allow for different levels of household indebtedness. The main results are: (a) the presence of impatient households and private debt helps to generate government spending multipliers greater than 1; (b) as financial conditions worsen, the size of the government spending multiplier falls; (c) conversely, employment, vacancies and unemployment multipliers are larger in a credit crunch; (d) the model explains the observed pattern of responses of labour market variables, housing prices and private debt to a fiscal shock reasonably well.

Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://hdl.handle.net/10.1111/ecca.2015.82.issue-s1 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Household Debt and Fiscal Multipliers (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:econom:v:82:y:2015:i::p:1048-1081

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0013-0427

Access Statistics for this article

Economica is currently edited by Frank Cowell, Tore Ellingsen and Alan Manning

More articles in Economica from London School of Economics and Political Science Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().