Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/296841 
Year of Publication: 
2022
Series/Report no.: 
ISER Discussion Paper No. 1196
Publisher: 
Osaka University, Institute of Social and Economic Research (ISER), Osaka
Abstract: 
Implementation lags are one of policymakers' concerns about fiscal policies, as these may reduce their efficacy. Using a standard New Keynesian model with an effective lower bound on the nominal interest rate, we compare the impacts of fiscal stimulus on output across various lengths of implementation lag. We show that despite concerns among policymakers, a fiscal authority can enhance the efficacy of government purchases on output with implementation lags when the economy is caught in a liquidity trap.
Subjects: 
Fiscal multiplier
Effective lower bound
Government spending
Liquidity trap
JEL: 
E32
E52
E62
Document Type: 
Working Paper

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