Briefing
Is stimulative fiscal policy more effective at the zero lower bound?
Abstract: Several recent research efforts have found that stimulative fiscal policy ? government spending or tax cuts ? can have unusual effects when nominal interest rates are as low as they are today. In particular, some studies have found that the government spending "multiplier" can be much larger at the zero lower bound. Despite these results, some caution is due when interpreting the size of the fiscal multiplier.
Keywords: Business cycles; Economic growth; Monetary policy; Fiscal policy;
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Bibliographic Information
Provider: Federal Reserve Bank of Richmond
Part of Series: Richmond Fed Economic Brief
Publication Date: 2011
Issue: Aug
Order Number: 11-8