Money, debt, and the effects of fiscal stimulusdoi:10.1016/j.eap.2021.11.005Yong MaLin LvEconomic Analysis and Policy
Money-Financed Fiscal Stimulus: The Effects of Implementation Lagdoi:10.2139/ssrn.3328295Takayuki TsurugaShota WakeSSRN Electronic Journal
This paper studies the local determinacy requirements and the effects of a money-financed fiscal stimulus under fiscal stress in a canonical New Keynesian model. We consider three alternative monetary policies and find that the money-financed policy adopted in Galí (2020) to keep zero-debt-increase...
Previous studies argue that, based on the New Keynesian framework, a fiscal stimulus financed by money creation has a strong positive effect on output under a rdoi:10.2139/ssrn.3226797Tsuruga, TakayukiWake, ShotaSocial Science Electronic Publishing...
The article sheds light on helicopter money's effectiveness in stimulating activity and bringing inflation back to target, in particular compared to the expected effect of a conventional debt-financed fiscal stimulus, while also drawing attention to the risks and limitations of such a policy option....
I’m not going to pretend we shouldn’t be more scrupulous and strategic with our spending, but isn’t there quite a bit of room for improving our current tax system to counter debt threats? Not to mention how the changes to the tax system over the last 30-40 years have contributed to...
The problems facing the whole banking system have never been greater. Individually, commercial banks are bound to take every opportunity to reduce their risk exposure before the market values of collateral, particularly equities, corporate debt and both residential and commercial property categories fall...
So, how might a marked increase in government debt and the monetary base impact the value of fiat money? If the “Proportional Claim Theory” of fiat money is right, then an accumulation of debt accompanied by an expansion of the monetary base could impact expectations regarding the long-term...
That make no sense, but politicians and their appointees are drawn to such policies because they want to minimize pain in the short run even though they are creating the conditions for far more pain in the long run. P.S. Debt limit fights are an example of some people supporting short-ru...
For these contributions, both policymakers and the public owe Milton Friedman an enormous debt. (Emphasis added) That’s why Ben Bernanke was my first choice for Fed chairman. He gets it. He understands that the job of the monetary policymaker is to focus like a laser on nominal stability....