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Toward a low carbon growth in Mexico: is a double dividend possible ? A dynamic general equilibrium assessment

Mauro Napoletano (), Andrea Roventini and Jean Luc Gaffard
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Andrea Roventini: OFCE-SciencesPo & Skema Business School
Jean Luc Gaffard: OFCE Sciences Po & Skema Business School

No 2015-25, Documents de Travail de l'OFCE from Observatoire Francais des Conjonctures Economiques (OFCE)

Abstract: We build an agent-based model populated by households with heterogenous and time-varying nancial conditions in order to study how scal multipliers can change over the business cycle and are a ected by the state of credit markets. We nd that deficit-spending scal policy dampens the e ect of bankruptcy shocks and lowers their persistence. Moreover, the size and dynamics of government spending multipli- ers are related to the degree and persistence of credit rationing in the economy. On the contrary, in presence of balanced-budget rules, output permanently falls below pre-shock levels and the ensuing multipliers fall below one and are much lower than the ones emerging from the deficit-spending policy. Finally, we show that di erent conditions in the credit market significantly a ect the size and the evolution of fiscal multipliers

New Economics Papers: this item is included in nep-dge, nep-env and nep-mac
Date: 2015-11
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