Fiscal Multipliers in Recessions

Canzoneri, Matthew; Collard, Fabrice; Dellas, Harris; Diba, Behzad (May 2012). Fiscal Multipliers in Recessions (Discussion Papers 12-04). Bern: Department of Economics

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The Great Recession, and the fiscal response to it, has revived interest in the size of fiscal multipliers. Standard business cycle models have difficulties generating multipliers greater than one. And they also fail to produce any significant asymmetry in the size of the multipliers over the business cycle. In this paper we employ a variant of the Curdia–Woodford model of costly financial intermediation to show that fiscal multipliers are strongly countercyclical. In particular, they can take values exceeding two during recessions, declining to values below one during expansions.

Item Type:

Working Paper

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics

UniBE Contributor:

Collard, Fabrice; Dellas, Harris and Diba, Behzad Tabatabai

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

Series:

Discussion Papers

Publisher:

Department of Economics

Language:

English

Submitter:

Lars Tschannen

Date Deposited:

27 Oct 2020 16:36

Last Modified:

27 Oct 2020 16:36

JEL Classification:

E32, E62, H3

BORIS DOI:

10.7892/boris.145756

URI:

https://boris.unibe.ch/id/eprint/145756

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