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dc.contributor.authorCORSETTI, Giancarlo
dc.contributor.authorKUESTER, Keith
dc.contributor.authorMEIER, André
dc.contributor.authorMÜLLER, Gernot J.
dc.date.accessioned2010-02-09T16:14:27Z
dc.date.available2010-02-09T16:14:27Z
dc.date.issued2010
dc.identifier.issn1725-6704
dc.identifier.urihttp://hdl.handle.net/1814/13223
dc.description.abstractThe global financial crisis of 2008–09 has sent public debt on sharply higher trajectories. With the economic recovery gradually taking hold, the focus is now shifting to fiscal “exit” strategies. Medium-term consolidation efforts are likely to include not only tax increases but also sizeable spending cuts. Our paper uses a standard new Keynesian model to show that the anticipation of such medium-term spending cuts generally enhances the expansionary effect of short-run fiscal stimulus. This conclusion still applies when monetary policy is constrained by the zero lower bound on policy rates. In this case, however, the reversal of government spending must not occur too early on the recovery path, or at least must be suitably gradual.en
dc.format.mimetypeapplication/pdf
dc.language.isoenen
dc.relation.ispartofseriesEUI ECOen
dc.relation.ispartofseries2010/03en
dc.rightsinfo:eu-repo/semantics/openAccess
dc.subjectFiscal policyen
dc.subjectfiscal stabilizationen
dc.subjectfiscal multiplieren
dc.subjectexit strategyen
dc.subjectconsolidationen
dc.subjectmonetary policyen
dc.subjectzero lower bounden
dc.subjectE63en
dc.subjectE62en
dc.subjectE52en
dc.titleDebt Consolidation and Fiscal Stabilization of Deep Recessionsen
dc.typeWorking Paperen
dc.neeo.contributorMEIER|André|aut|
dc.neeo.contributorMÜLLER|Gernot J.|aut|
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