An analytical characterization of noisy fiscal policy
Kass-Hanna, Tannous and
Mario Pietrunti ()
Economics Letters, 2016, vol. 148, issue C, 76-79
This paper provides an analytical characterization of the effects of noisy news shocks on fiscal policy. We consider a small-scale Dynamic Stochastic General Equilibrium (DSGE) model with capital accumulation and endogenous labor supply and show that noise dampens the propagation of anticipated fiscal policy over the business cycle, thus reducing the fiscal multiplier.
Keywords: Government spending shocks; Expected shocks; Noisy information; DSGE models (search for similar items in EconPapers)
JEL-codes: E62 (search for similar items in EconPapers)
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Working Paper: An Analytical Characterization of Noisy Fiscal Policy (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:148:y:2016:i:c:p:76-79
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