Government Spending Effects in a Policy Constrained Environment
2020/07/20
研討會日期 : 2020-07-20
時間 : 11:00
主講人 : Professor Shu-Chun Yang (楊淑珺)
主持人 : Professor Tzu-Ting Yang
地點 : Conference Room B110
演講者簡介 : Professor Yang received her Ph.D. in Economics from Indiana University in 2003. She is currently a Senior Economist at International Monetary Fund. Her research fields are macroeconomic effects of fiscal policy, DSGE modeling, and macroeconomic management of natural resource revenues. She is applying for a position of the Institute of Economics, Academia Sinica now.
演講摘要 : The theoretical literature generally finds that government spending multipliers are bigger than unity in a low interest rate environment. Using a fully nonlinear New Keynesian model, we show that such big multipliers can decrease when 1) an initial debt-to-GDP ratio is higher, 2) tax burden is higher, 3) debt maturity is longer, and 4) monetary policy is more responsive to inflation. When monetary and fiscal policy regimes can switch, policy uncertainty also reduces spending multipliers. In particular, when higher inflation induces a rising probability to switch to a regime in which monetary policy actively controls inflation and fiscal policy raises future taxes to stabilize government debt, the multipliers can fall much below unity, especially with an initial high debt ratio. Our findings help reconcile the mixed empirical evidence on government spending effects with low interest rates.
