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Is stimulative fiscal policy more effective at the zero lower bound?

Author

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  • Renee Courtois Haltom
  • Pierre-Daniel G. Sarte

Abstract

Several recent research efforts have found that stimulative fiscal policy ? government spending or tax cuts ? can have unusual effects when nominal interest rates are as low as they are today. In particular, some studies have found that the government spending "multiplier" can be much larger at the zero lower bound. Despite these results, some caution is due when interpreting the size of the fiscal multiplier.

Suggested Citation

  • Renee Courtois Haltom & Pierre-Daniel G. Sarte, 2011. "Is stimulative fiscal policy more effective at the zero lower bound?," Richmond Fed Economic Brief, Federal Reserve Bank of Richmond, issue Aug.
    • Handle: RePEc:fip:fedreb:y:2011:i:aug:n:11-8
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    Citations

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    Cited by:

    1. Constantinos Alexiou & Joseph G. Nellis, 2017. "Cyclical Multiplier and Zero Low Bound Effects of Government Expenditure on Economic Growth: Evidence for Greece," Australian Economic Papers, Wiley Blackwell, vol. 56(2), pages 119-133, June.
    2. Matthew Canzoneri & Fabrice Collard & Harris Dellas & Behzad Diba, 2016. "Fiscal Multipliers in Recessions," Economic Journal, Royal Economic Society, vol. 126(590), pages 75-108, February.
    3. Nkrumah, Kwabena Meneabe, 2020. "Fiscal Policy Innovations in Advanced Economies," MPRA Paper 98740, University Library of Munich, Germany.
    4. Nkrumah, Kwabena Meneabe, 2018. "Essays In Fiscal Policy And State Dependence Fiscal Policy Innovations Using A New Econometric Approach," MPRA Paper 98689, University Library of Munich, Germany.

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