The Effects of Discretionary Fiscal Stimulus: A Survey

MPRA Paper from University Library of Munich, Germany

Abstract: This paper surveys evidence on fiscal multipliers from the Euro area and the United States obtained by direct, cross-state or economywide measures of the effects of broad-based tax cuts and increases in government purchases. In view of the evidence in the literature I conclude that that fiscal policy may be substantially more effective when the proportion of households and firms that are liquidity constrained is high and when utilization of factors of production is low.

Keywords: Multipliers; Fiscal policy; Monetary policy; Liquidity constraints (search for similar items in EconPapers)
JEL-codes: E24 E32 E44 E62 E63 (search for similar items in EconPapers)
Date: 2012-08-20
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Citations: View citations in EconPapers (4)

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