Mr. Ricardo's Great Adventure Estimating Fiscal Multipliers in a Truly Intertemporal Model

Author/creator Sgherri, Silvia Author
Other author Bayoumi, Tamim Author
Format Electronic
Publication InfoWashington : International Monetary Fund
Description42 p.
Supplemental ContentFull text available from Ebook Central - Academic Complete

Summary Annotation We estimate tax multipliers in a Blanchard-Yaari consumption model where Ricardian equivalence is broken because the private sector discounts the future at a faster rate than the real rate of interest. the model fits U.S. data since 1955 extremely well-entailing a discount wedge of around 20 percent a year and fiscal multipliers of 0.15-0.4-depending on the permanence of the change in taxes/transfers, and is much superior to one that assumes some consumers are fully Ricardian and others follow simple rules of thumb. the implied high private sector rate of discount has wide implications for policymakers.
Access restrictionAvailable only to authorized users.
Technical detailsMode of access: World Wide Web
Genre/formElectronic books.
ISBN9781451985993
ISBN1451985991 (E-Book) Active Record
Stock number00013468

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