The aggregate and distributional effects of fiscal stimuli

Paweł Kopiec ()

Economic Modelling, 2024, vol. 134, issue C

Abstract: This paper compares the aggregate and distributional effects of three fiscal policy instruments: government expenditures, unemployment benefits, and transfers. To this end, the canonical model of frictional labor market is embedded into an otherwise standard incomplete markets framework where firms face price-adjustment costs. The model calibrated to match the moments characterizing the US economy successfully replicates the empirical distributions of households across: disposable income, consumption expenditures and net worth. The analysis quantifies the aggregate and distributional responses to changes in government expenditures, unemployment benefits, and transfers. Moreover, the stabilizing role of the analyzed fiscal measures is evaluated.

Keywords: Heterogeneous agents; Frictional markets; Fiscal stimulus (search for similar items in EconPapers)
JEL-codes: D30 E62 H23 H30 H31 (search for similar items in EconPapers)
Date: 2024
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Working Paper: The Aggregate and Distributional Effects of Fiscal Stimuli (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:134:y:2024:i:c:s0264999324000476

DOI: 10.1016/j.econmod.2024.106691

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