EconPapers    
Economics at your fingertips  
 

Fiscal Stimulus and Distortionary Taxation

Thorsten Drautzburg and Harald Uhlig ()

No 17111, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We quantify the fiscal multipliers in response to the American Recovery and Reinvestment Act (ARRA) of 2009. We extend the benchmark Smets-Wouters (2007) New Keynesian model, allowing for credit-constrained households, the zero lower bound, government capital and distortionary taxation. The posterior yields modestly positive short-run multipliers around 0.52 and modestly negative long-run multipliers around -0.42. The multiplier is sensitive to the fraction of transfers given to credit-constrained households, the duration of the zero lower bound and the capital. The stimulus results in negative welfare effects for unconstrained agents. The constrained agents gain, if they discount the future substantially.

JEL-codes: E62 E63 E65 H20 H62 (search for similar items in EconPapers)
Date: 2011-06
New Economics Papers: this item is included in nep-cba, nep-dge and nep-mac
Note: EFG
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (42) Track citations by RSS feed

Published as Thorsten Drautzburg & Harald Uhlig, 2015. "Fiscal Stimulus and Distortionary Taxation," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 18(4), pages 894-920, October.

Downloads: (external link)
http://www.nber.org/papers/w17111.pdf (application/pdf)

Related works:
Journal Article: Fiscal Stimulus and Distortionary Taxation (2015) Downloads
Working Paper: Fiscal stimulus and distortionary taxation (2013) Downloads
Working Paper: Fiscal stimulus and distortionary taxation (2011) Downloads
Working Paper: Fiscal Stimulus and Distortionary Taxation (2011) Downloads
Working Paper: Fiscal stimulus and distortionary taxation (2011) Downloads
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:nbr:nberwo:17111

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w17111

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2020-11-23
Handle: RePEc:nbr:nberwo:17111