Mr. Ricardo's Great Adventure : Estimating Fiscal Multipliers in a Truly Intertemporal Model /

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Bibliographic Details
Author / Creator:	Sgherri, Silvia.
Imprint:	Washington, D.C. : International Monetary Fund, 2006.
Description:	1 online resource (30 pages)
Language:	English
Series:	IMF Working Papers, 2227-8885 ; Working Paper No. 06/168 IMF Working Papers ; Working Paper no. 06/168.
Subject:	Fiscal policy. Multiplier (Economics) Fiscal policy Multiplier (Economics)
Format:	E-Resource Book
URL for this record:	http://pi.lib.uchicago.edu/1001/cat/bib/14153798

Hidden Bibliographic Details
Other authors / contributors:	Bayoumi, Tamim. Sgherri, Silvia. International Monetary Fund.
ISBN:	1451985991 9781451985993 9781451985993
Notes:	Available in PDF, ePUB, and Mobi formats on the Internet.
Summary:	We estimate tax multipliers in a ""Blanchard-Yaari"" consumption model where Ricardian equivalence is broken because the private sector discounts the future at a faster rate than the real rate of interest. The model fits U.S. data since 1955 extremely well-entailing a discount wedge of around 20 percent a year and fiscal multipliers of 0.15-0.4-depending on the permanence of the change in taxes/transfers, and is much superior to one that assumes some consumers are fully Ricardian and others follow simple rules of thumb. The implied high private sector rate of discount has wide implications for policymakers.
Standard no.:	10.5089/9781451985993.001

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