New Keynesian versus Old Keynesian Government Spending Multipliers / John F. Cogan, Tobias Cwik, John B. Taylor, Volker Wieland.

Format:

Book

Author/Creator:

Cogan, John F.

Contributor:

National Bureau of Economic Research.

Cwik, Tobias.

Taylor, John B.

Wieland, Volker.

Series:

Working Paper Series (National Bureau of Economic Research) no. w14782.

NBER working paper series no. w14782

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2009.

Summary:

Renewed interest in fiscal policy has increased the use of quantitative models to evaluate policy. Because of modelling uncertainty, it is essential that policy evaluations be robust to alternative assumptions. We find that models currently being used in practice to evaluate fiscal policy stimulus proposals are not robust. Government spending multipliers in an alternative empirically-estimated and widely-cited new Keynesian model are much smaller than in these old Keynesian models; the estimated stimulus is extremely small just when needed most, and GDP and employment effects are only one-sixth as large, with private sector employment impacts likely to be even smaller.

Notes:

Print version record

March 2009.