Wu, Jing Cynthia; Xie, Yinxi - 2023 - Last updated: January 26, 2023
We build a tractable New Keynesian model to study four types of monetary and fiscal policy. We find that quantitative … monetary policy do not. Ricardian equivalence breaks down: tax-financed fiscal policy is more stimulative than debt … easing (QE), lump-sum fiscal transfers, and government spending have the same effects on the aggregate economy when fiscal …