The effects of a money-financed fiscal stimulus

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• dc.contributor.author Galí, Jordi, 1961-
• dc.date.accessioned 2020-06-29T11:11:23Z
• dc.date.issued 2020
• dc.description.abstract I analyze the effects of a money-financed fiscal stimulus and compare them with those resulting from a conventional debt-financed stimulus. I study the effects of both a tax cut and an increase in government purchases, with and without a binding zero lower bound (ZLB) on the nominal interest rate. When the ZLB is not binding, a money-financed fiscal stimulus is shown to have much larger multipliers than a debt-financed fiscal stimulus. That difference in effectiveness persists, but is much smaller, under a binding ZLB. Nominal rigidities are shown to play a major role in shaping those effects.
• dc.description.sponsorship Funding from CERCA Programme/Generalitat de Catalunya and the Barcelona GSE through a Severo Ochoa grant is gratefully acknowledged.
• dc.format.mimetype application/pdf
• dc.identifier.citation Galí J. The effects of a money-financed fiscal stimulus. Journal of Monetary Economics. 2020 Nov;115:1-19. DOI: 10.1016/j.jmoneco.2019.08.002
• dc.identifier.doi http://dx.doi.org/10.1016/j.jmoneco.2019.08.002
• dc.identifier.issn 0304-3932
• dc.identifier.uri http://hdl.handle.net/10230/45049
• dc.language.iso eng
• dc.publisher Elsevier
• dc.relation.ispartof Journal of Monetary Economics. 2020 Nov;115:1-19. DOI: 10.1016/j.jmoneco.2019.08.002
• dc.rights © Elsevier https://doi.org/10.1016/j.jmoneco.2019.08.002
• dc.rights.accessRights info:eu-repo/semantics/openAccess
• dc.subject.keyword Seignorage
• dc.subject.keyword Government spending
• dc.subject.keyword Fiscal multipliers
• dc.subject.keyword Helicopter drop
• dc.title The effects of a money-financed fiscal stimulus
• dc.type info:eu-repo/semantics/article
• dc.type.version info:eu-repo/semantics/acceptedVersion