Kocherlakota, Narayana Rao - National Bureau of Economic Research - 2021
fiscal policy. I use an analytically tractable heterogeneous agent New Keynesian (HANK) model that is parameterized so as to … response to aggregate shocks by varying only fiscal policy (that is, lump-sum uniform transfers). In contrast, when the public … policy). The theoretical analysis implies that, in the presence of a large public debt bubble, fiscal policy is a more …