The Aggregate and Distributional Effects of Fiscal Stimuli

Paweł Kopiec ()

No 2022-070, KAE Working Papers from Warsaw School of Economics, Collegium of Economic Analysis

Abstract: This paper compares the aggregate and distributional effects of three fiscal policy instruments: government expenditures, unemployment benefits andtransfers. To this end, the Diamond-Mortensen-Pissarides model of frictionallabor market is embedded into an otherwise standard Heterogeneous AgentNew Keynesian framework. The model calibrated to match the moments characterizingthe US economy successfully replicates the empirical distributionsof households across: disposable income, consumption expenditures and networth. The solution method developed by Reiter (2009) is applied to quantifythe aggregate and distributional responses to changes in the analyzedfiscal measures. Moreover, the stabilizing role of government expenditures,unemployment benefits and transfers is assessed.

Keywords: heterogeneous agents; frictional markets; fiscal stimulus (search for similar items in EconPapers)
JEL-codes: D30 E62 H23 H30 H31 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2022-01
New Economics Papers: this item is included in nep-dge and nep-mac
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https://hdl.handle.net/20.500.12182/1127 (application/pdf)

Related works:
Journal Article: The aggregate and distributional effects of fiscal stimuli (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:sgh:kaewps:2022070

DOI: 10.33119/kaewps2022070

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