Learning about fiscal policy and the effects of policy uncertainty
| Autor: | Josef Hollmayr, Christian Matthes |
|---|---|
| Rok vydání: | 2015 |
| Předmět: |
Change over time
Macroeconomics Rational expectations Economics and Econometrics Government Control and Optimization Short run jel:E62 Applied Mathematics media_common.quotation_subject jel:D83 jel:E32 Fiscal union Recession Fiscal policy DSGE Fiscal Policy Learning Ask price Economics Dynamic stochastic general equilibrium Volatility (finance) media_common |
| Zdroj: | Journal of Economic Dynamics and Control. 59:142-162 |
| ISSN: | 0165-1889 |
| DOI: | 10.1016/j.jedc.2015.08.002 |
| Popis: | The recent crisis in the United States has often been associated with substantial amounts of policy uncertainty. In this paper we ask how uncertainty about fiscal policy affects the impact of fiscal policy changes on the economy when the government tries to counteract a deep recession. The agents in our model act as econometricians by estimating the policy rules for the different fiscal policy instruments, which include distortionary tax rates. Comparing the outcomes in our model to those under full-information rational expectations, we find that assuming that agents are not instantaneously aware of the new fiscal policy regime (or policy rule) in place leads to substantially more volatility in the short run and persistent differences in average outcomes. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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