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The aggregate and distributional effects of fiscal stimuli

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  • Kopiec, Paweł

Abstract

This paper compares the aggregate and distributional effects of three fiscal policy instruments: government expenditures, unemployment benefits, and transfers. To this end, the canonical model of frictional labor market is embedded into an otherwise standard incomplete markets framework where firms face price-adjustment costs. The model calibrated to match the moments characterizing the US economy successfully replicates the empirical distributions of households across: disposable income, consumption expenditures and net worth. The analysis quantifies the aggregate and distributional responses to changes in government expenditures, unemployment benefits, and transfers. Moreover, the stabilizing role of the analyzed fiscal measures is evaluated.

Suggested Citation

  • Kopiec, Paweł, 2024. "The aggregate and distributional effects of fiscal stimuli," Economic Modelling, Elsevier, vol. 134(C).
    • Handle: RePEc:eee:ecmode:v:134:y:2024:i:c:s0264999324000476
    DOI: 10.1016/j.econmod.2024.106691
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    More about this item

    Keywords

    Heterogeneous agents; Frictional markets; Fiscal stimulus;
    All these keywords.

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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