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Effects of Fiscal Stimulus in Structural Models*

* This paper is a replication of an original study

Author

Listed:
  • Günter Coenen
  • Christopher J. Erceg
  • Charles Freedman
  • Davide Furceri
  • Michael Kumhof
  • René Lalonde
  • Douglas Laxton
  • Jesper Lindé
  • Annabelle Mourougane
  • Dirk Muir
  • Susanna Mursula
  • Carlos de Resende
  • John Roberts
  • Werner Roeger
  • Stephen Snudden
  • Mathias Trabandt
  • Jan in't Veld

Abstract

The paper subjects seven structural DSGE models, all used heavily by policymaking institutions, to discretionary fiscal stimulus shocks using seven different fiscal instruments, and compares the results to those of two prominent academic DSGE models. There is considerable agreement across models on both the absolute and relative sizes of different types of fiscal multipliers. The size of many multipliers is large, particularly for spending and targeted transfers. Fiscal policy is most effective if it has moderate persistence and if monetary policy is accommodative. Permanently higher spending or deficits imply significantly lower initial multipliers. (JEL E12, E13, E52, E62)

Suggested Citation

  • Günter Coenen & Christopher J. Erceg & Charles Freedman & Davide Furceri & Michael Kumhof & René Lalonde & Douglas Laxton & Jesper Lindé & Annabelle Mourougane & Dirk Muir & Susanna Mursula & Carlos d, 2012. "Effects of Fiscal Stimulus in Structural Models," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(1), pages 22-68, January.
    • Handle: RePEc:aea:aejmac:v:4:y:2012:i:1:p:22-68
    Note: DOI: 10.1257/mac.4.1.22
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    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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    1. Effects of Fiscal Stimulus in Structural Models (AEJ:MA 2012) in ReplicationWiki

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