A fiscal stimulus with deep habits and optimal monetary policy

Cristiano Cantore, Paul Levine (), Giovanni Melina and Bo Yang

Economics Letters, 2012, vol. 117, issue 1, 348-353

Abstract: A New-Keynesian model with deep habits and optimal monetary policy delivers a larger-than-1 fiscal multiplier and consumption crowding in. Optimized Taylor-type rules dominate a conventional Taylor rule. Consumption is crowded out if the Taylor rule is suboptimal or if commitment is absent.

Keywords: Deep habits; Optimal monetary policy; Price-level rule (search for similar items in EconPapers)
JEL-codes: E30 E62 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176512003199
Full text for ScienceDirect subscribers only

Related works:
Working Paper: A Fiscal Stimulus with Deep Habits and Optimal Monetary Policy (2012)
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:eee:ecolet:v:117:y:2012:i:1:p:348-353

DOI: 10.1016/j.econlet.2012.05.051

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().