On Keynesian effects of (apparent) non-Keynesian fiscal policies

Rosaria Rita Canale, Pasquale Foresti, Ugo Marani and Oreste Napolitano ()

MPRA Paper from University Library of Munich, Germany

Abstract: The aim of this paper is to evaluate the robustness of the theory that claims restrictive effects of expansionary fiscal policy. It shows that such so-called “non-Keynesian effects” may arise from synchronous and opposite monetary policy interventions. The paper demonstrates this conclusion through a stylized model – supported by an empirical investigation on ECB and FED reaction functions – in which Central Banks consider deficit spending as an element that generates inflation expectations. Econometric analysis also shows that the ECB reacts asymmetrically to deficit spending variations while the FED has a linear reaction to this indicator.

Keywords: Fiscal policy; Monetary policy; Central Banks Policy strategies (search for similar items in EconPapers)
JEL-codes: E52 E58 E62 E63 (search for similar items in EconPapers)
Date: 2007-06-30, Revised 2007-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: On keynesian effects of (apparent) non-keynesian fiscal policies (2008)
Working Paper: On Keynesian effects of (apparent) non-Keynesian fiscal policies (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:3742

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