Fiscal Policy in an Expectations-Driven Liquidity Trap

• 成果类型: Article
• 署名作者: Mertens, Karel R. S. M.; Ravn, Morten O.
• 署名单位: Cornell University; National Bureau of Economic Research; University of London; University College London
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdu016
• 发表日期: 2014
• 页码: 1637-1667
• 关键词: monetary-policy; inflation

摘要

We study the effects of fiscal policy interventions in a liquidity trap in a model with nominal rigidities and an interest rate rule. In a liquidity trap caused by a self-fulfilling state of low confidence, higher government spending has deflationary effects that reduce the spending multiplier when the zero lower bound is binding. Instead, cuts in marginal labour tax rates are inflationary and become more expansionary when the zero lower bound is binding. These findings contradict a popular view, based on a liquidity trap caused by a fundamental shock such as a taste shock, that higher government spending is inflationary and can therefore be associated with large multipliers at the zero lower bound, while lower marginal tax rates are deflationary and therefore counterproductive.