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Fiscal Policy: Financing and Indebtedness / Jing Cynthia Wu, Shihan Xie, Yinxi Xie, Ji Zhang.
- Format:
- Book
- Author/Creator:
- Wu, Jing Cynthia.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w34551.
- NBER working paper series no. w34551
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2025.
- Summary:
- We conduct a large-scale information randomized controlled trial to study fiscal policy impacts. Surveying approximately 9,000 households across five eurozone countries with varying debt-to-GDP ratios enables a clean cross-country comparison. The key finding is that the fiscal multiplier depends jointly on the financing method and the country's debt burden: multipliers are smaller in high-debt countries when debt-financed but remain similar across countries when tax-financed. Finally, we develop a New Keynesian model featuring fiscal discipline, which reproduces the empirical patterns observed in the survey and highlights their underlying economic mechanisms.
- Notes:
- December 2025.
- Print version record
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