New Keynesian versus old Keynesian government spending multipliers

John F. Cogan, Tobias Cwik, John Taylor and Volker Wieland

No 2009/17, CFS Working Paper Series from Center for Financial Studies (CFS)

Abstract: Renewed interest in fiscal policy has increased the use of quantitative models to evaluate policy. Because of modeling uncertainty, it is essential that policy evaluations be robust to alternative assumptions. We find that models currently being used in practice to evaluate fiscal policy stimulus proposals are not robust. Government spending multipliers in an alternative empirically-estimated and widely-cited new Keynesian model are much smaller than in these old Keynesian models; the estimated stimulus is extremely small with GDP and employment effects only one-sixth as large.

Keywords: Fiscal Multiplier; New Keynesian Model; Fiscal Stimulus; Government Spending; Macroeconomic Modeling (search for similar items in EconPapers)
JEL-codes: C52 E62 (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (139)

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Related works:
Journal Article: New Keynesian versus old Keynesian government spending multipliers (2010)
Working Paper: New Keynesian versus old Keynesian government spending multipliers (2009)
Working Paper: New Keynesian versus old Keynesian government spending multipliers (2009)
Working Paper: New Keynesian versus Old Keynesian Government Spending Multipliers (2009)
Working Paper: New Keynesian Versus Old Keynesian Government Spending Multipliers (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cfswop:200917

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