Does fiscal policy matter?
Subtitle: blinder and solow revisited
By: Roger E.A. Farmer, Dmitry Plotnikov
Contributors: Plotnikov, Dmitry; National Bureau of Economic Research
Series: NBER working paper series -- working paper 16644; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 16644.
Publisher: National Bureau of Economic Research
Published: 2010
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource]
Description: "This paper uses the old-Keynesian representative agent model developed in Farmer (2010b) to answer two questions: 1) do increased government purchases crowd out private consumption? 2) do increased government purchases reduce unemployment? Farmer compared permanent tax financed expenditure paths and showed that the answer to 1) was yes and the answer to 2) was no.  We generalize his result to temporary bond-financed paths of government purchases that are similar to the actual path that occurred during WWII.  We find that a temporary increase in government purchases does crowd out private consumption expenditure as in Farmer (2010b).  However, in contrast to Farmer's experiment we find that a temporary increase in government purchases can also reduce unemployment"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 4/12/2011.

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