Skip to Main content Skip to Navigation
Preprints, Working Papers, ...

Outside the corridor : fiscal multipliers and business cycles into an agent based models with liquidity constraints

Abstract : We build an agent-based model to study how _scal multipliers can change over the business cycle. Our approach considers the economy as a complex evolving system. In that, _scal state-dependent multipliers are emergent disequilibrium phenomenon stemming from the interaction among an ecology of heterogeneous agents. We study _scal multipliers in response to di_erent microeconomic shocks hitting the economy. We show that de_cit-spending _scal policy dampens the e_ect of a shock and lowers its persistence. Moreover, we show that the size and dynamics of the _scal multi- plier is inversely related to the evolution of credit rationing in the aftermath of the shock. We also investigate the e_ects of two di_erent balanced budget rules. In the _rst type of such experiments, government expenditure is constrained to be equal to tax revenues of each period. In the second one the tax rate is eventually raised to balance a given level of government expenditure. We show that _scal multipliers are very low with both balanced-budget rules. Finally, we show that _scal multipliers are higher into more leveraged economies.
Document type :
Preprints, Working Papers, ...
Complete list of metadata

Cited literature [7 references]  Display  Hide  Download

https://hal-sciencespo.archives-ouvertes.fr/hal-01063367
Contributor : Spire Sciences Po Institutional Repository Connect in order to contact the contributor
Submitted on : Thursday, September 11, 2014 - 11:30:20 PM
Last modification on : Wednesday, October 27, 2021 - 2:18:11 PM
Long-term archiving on: : Friday, April 14, 2017 - 11:36:30 AM

File

wp2014-16.pdf
Files produced by the author(s)

Identifiers

Collections

Citation

Mauro Napoletano, Jean-Luc Gaffard, Andrea Roventini. Outside the corridor : fiscal multipliers and business cycles into an agent based models with liquidity constraints. 2014. ⟨hal-01063367⟩

Share

Metrics

Les métriques sont temporairement indisponibles