Expansionary contractions and fiscal free lunches too good to be true ? Richard McManus, Gulcin Ozkan, Dawid Trzeciakiewicz
By: MacManus, Richard
.
Contributor(s): Özkan, F. Gülçin | Trzeciakiewicz, Dawid.
Material type: 
ArticlePublisher: 2019Subject(s): POLITICA FISCAL | ECONOMIAS DE ESCALA | MODELOS ECONOMETRICOS
In:
The Scandinavian Journal of Economics v. 121, n. 1, 2019, p. 32-54Summary: This paper builds a framework to jointly examine the possibilities of both expansionary fiscal contractions (austerity increasing output) and fiscal free lunches (expansions reducing gover nment debt), arguments which in recent debates have been suppor ted by the austerity and stimulus camps, respectively. We propose a new metric quantifying the budgetary implications of
fiscal action, a key aspect of fiscal policy particularly at the monetary zero lower bound. We find that austerity needs to be highly persistent and credible in order to be expansionary, and stimulus needs to be temporary, responsive, and well-targeted in order to lower debt. We conclude that neither is likely, especially during periods of economic distress.
| Item type | Current location | Home library | Call number | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
| Artículos | IEF | IEF | OP 1376/2019/1-1 (Browse shelf) | Available | OP 1376/2019/1-1 |
Resumen.
Bibliografía.
This paper builds a framework to jointly examine the possibilities of both expansionary fiscal contractions (austerity increasing output) and fiscal free lunches (expansions reducing gover nment debt), arguments which in recent debates have been suppor ted by the austerity and stimulus camps, respectively. We propose a new metric quantifying the budgetary implications of
fiscal action, a key aspect of fiscal policy particularly at the monetary zero lower bound. We find that austerity needs to be highly persistent and credible in order to be expansionary, and stimulus needs to be temporary, responsive, and well-targeted in order to lower debt. We conclude that neither is likely, especially during periods of economic distress.
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