Estimation of Government Spending Multiplier in EU Economies

When is the Government Spending Multiplier Large?

When the zero bound on nominal interest rates is binding.

On the usefulness of government spending in the EU area

Government Spending Multiplier in a Model with Financial Friction

During the recent financial crisis, huge fiscal stimulus packages were initiated and bold actions were taken by monetary authorities in many countries. Inspired by these, I explore the impact of fiscal stimulus when I take financial friction and liquidity trap into account. In particular, I investigate the fiscal multiplier in a dynamic stochastic general equilibrium model which is featured wit...

Government Spending and Growth

Private Debt Overhang and the Government Spending Multiplier: Evidence for the United States

Using state-dependent local projection methods and historical U.S. data, we find that government spending multipliers are considerably larger in periods of private debt overhang. In particular, we find significant crowding-out of personal consumption and investment in low private debt states, resulting in multipliers that are below one. Conversely, in periods of private debt overhang, there is ...