Policy Effects in a Simple Fully Non-Linear New Keynesian Model of the Liquidity Trap

dc.contributor.authorHahn, Volker
dc.date.accessioned2019-12-02T10:01:20Z
dc.date.available2019-12-02T10:01:20Z
dc.date.issued2017eng
dc.description.abstractWe analyze a simple yet fully non-linear New Keynesian model of the liquidity trap. Productivity shocks are the only source of aggregate fluctuations and the central bank acts as a discretionary policy maker that pursues an inflation targeting strategy. We use this model to assess the effects of fiscal policy in a liquidity trap, the consequences of a commitment to change government expenditures in the future as well as the implications of lower taxes on labor and a higher inflation target. In contrast with some previous papers, we find that the effects of fiscal policy in a liquidity trap are moderate and that reductions in labor income taxes are expansionary. We do not find support for higher inflation targets.eng
dc.description.versionpublishedde
dc.identifier.ppn1684672031
dc.identifier.urihttps://kops.uni-konstanz.de/handle/123456789/47753
dc.language.isoengeng
dc.relation.ispartofseriesWorking Paper Series / Department of Economics
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dc.subjectzero lower bound, fiscal multiplier, liquidity trap, new Keynesian model, multiple equilibria, inflation targeteng
dc.subject.ddc330eng
dc.titlePolicy Effects in a Simple Fully Non-Linear New Keynesian Model of the Liquidity Trapeng
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@techreport{Hahn2017Polic-47753,
  year={2017},
  series={Working Paper Series / Department of Economics},
  title={Policy Effects in a Simple Fully Non-Linear New Keynesian Model of the Liquidity Trap},
  number={2017-05},
  url={https://ideas.repec.org/p/knz/dpteco/1705.html},
  author={Hahn, Volker}
}
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kops.citation.iso690HAHN, Volker, 2017. Policy Effects in a Simple Fully Non-Linear New Keynesian Model of the Liquidity Trapeng
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kops.urlDate2019-12-06
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