This study examines how economic inequality influences the effectiveness of fiscal policy using a three-agent New Keynesian DSGE model with incomplete financial markets. The findings suggest that economies with a high share of liquidity-constrained households exhibit larger fiscal multipliers...

We conduct a large-scale information randomized controlled trial to study fiscal policy impacts. Surveying approximately 9,000 households across five eurozone countries with varying debt-to-GDP ratios enables a clean cross-country comparison. The key finding is that the fiscal multiplier depends...

This paper is about fiscal consolidation measures (i.e. tax hikes and government spending cuts motivated by a desire to reduce the fiscal deficit and public debt) in euro area (EA) countries. The focus is on analysing the growth effects of fiscal adjustments as well as their implications for...

This paper is about fiscal consolidation measures (i.e. tax hikes and government spending cuts motivated by a desire to reduce the fiscal deficit and public debt) in euro area (EA) countries. The focus is on analysing the growth effects of fiscal adjustments as well as their implications for...

This paper examines, through a modified aggregate demand curve, the reduction in equilibrium income caused by the presence of precautionary demand in the money demand function. Specifically, this paper rigorously analyses the transformation of the well-known fiscal and monetary policy...

Japanís prolonged ZLB period alongside substantial debt accumulation makes it a compelling laboratory for testing whether fiscal multipliers differ across normal and ZLB periods. This paper investigates this question using a sign- and zero-restricted TVP-VAR that jointly identifies fiscal rules...

The purpose of this note is to help mainstream fiscal multipliers in PFRs. It aims to provide guidance for estimating fiscal multipliers in developing countries by leveraging the World Bank’s macroeconomic and fiscal model (MFMod) to generate country-specific estimates. While other methods are...

This paper estimates the macroeconomic effects of fiscal consolidations in sub-Saharan Africa using a newly constructed narrative dataset of discretionary fiscal policy actions for 14 countries over 1990–2024. The dataset, documented in Abdel-Latif et. al. (2025), identifies fiscal measures...

We study how procurement-driven fiscal contractions propagate through firm-to-firm pro- duction networks. The 2014 collapse in oil prices triggered a sharp fall in public procure- ment in Ecuador, generating an externally driven fiscal demand shock. Using administra- tive data covering the...

The expansionary austerity thesis (EAT) emerged and established itself in the 1990s, based on theoretical and empirical research, and was rapidly incorporated into macroeconomic theory. In a nutshell, fiscal consolidations, aimed at stabilising or lowering the public debt-to-GDP ratio, can...

This paper analyzes the local economic impacts of troop deployments. We exploit variation from the historic large-scale US troop withdrawal from Germany triggered by the end of the Cold War, to estimate the effect on local labor markets and public finances. We use administrative data provided by...

I estimate regime-dependent spillover effects from government spending shocks across the members of the European Monetary Union (EMU). I use panel regressions for a total of 14 EMU economies from 1997 to 2022. Government spending shocks are defined by unexpected innovations to forecast...

In studying the economic cycle dependency of fiscal multipliers in Chile, we implement an independent component analysis for structural shock identification within a non-linear vector autoregressive setting with generalized impulse response functions. Thereby we relax more restrictive...

We estimate government spending multipliers in demand- and supply-driven recessions for the Euro Area. Multipliers in a moderately demand-driven recession are 2-3 times larger than in a moderately supply-driven recession, with the difference between multipliers being non-zero with very high...

The paper examines the macroeconomic effects of fiscal policy under varying economic conditions. The analysis is conducted using a closed-economy agent-based model, where macroeconomic outcomes of fiscal intervention emerge from the bottom up as the result of interactions between heterogeneous...

This paper investigates how an increase in military expenditures affects an economy. It is written in the context of rising geopolitical tensions that have spurred increased military spending in the United States, Europe, and other economic areas. It draws on a large literature in...

We construct a narrative instrument for government investment from official records in Germany. Using structural vector autoregressions, we document a significant crowding-in of private investment and an output multiplier of roughly 2. Then, we match a New Keynesian dynamic stochastic general...

We study the economic effects of the interaction of nature loss and climate change in a model that incorporates important aspects of both processes. We capture the distinct ways in which they affect economic activity—with nature constituting a key factor of production and climate change...

A literacy-targeted approach to economic instruction draws on insights from cognitive science. It highlights that students process complex economic information by constructing and modifying schemas that represent economic material. Following this approach, we developed a set of instructional...

This article suggests that the expenditure multiplier and the interactions among its key components can help explain whether increasing public debt encourages or inhibits economic growth. As per the theoretical underpinnings of the effect of debt on growth, its influence is observable in regard...

The revival of economic nationalism poses a challenge to neoclassical orthodoxy, which claims that liberalized international trade is (subject to a few recognized exceptions) inherently cooperative and mutually beneficial. Post-Keynesian open economy models demonstrate that international trade...

This paper analyzes the macroeconomic impact of Generative Artificial Intelligence (GenAI) on the Finnish economy, integrating recent literature and empirical evidence into a quantitative multi-sector general equilibrium model. The results indicate that, over a ten-year horizon, GenAI adoption...

This paper provides novel empirical evidence on how political fragmentation shapes the fiscal transmission mechanism. Using data from 16 OECD countries (1978-2019) and narrative accounts to identify exogenous fiscal interventions, we show that when political fragmentation is high, the fiscal GDP...

Fiscal policy plays an important macroeconomic role in Mongolia. On the one hand, fiscal expansion is seen as a measure to boost aggregate demand. On the other hand, import leakages mitigate the impact of fiscal expansion on growth. Applying a structural vector autoregressive model, this paper...

This paper investigates dynamic relationships between U.S. government expenditure multipliers and the economy's cyclical position from 1949 to 2018 using a Time-Varying Parameter Vector Autoregression (TVP-VAR) model. We challenge the existing literature, which predominantly relies on predefined...

This paper investigates the relationship between public debt and the effectiveness of fiscal policy, presenting evidence of an inverse relationship between government debt and fiscal multipliers. To explain the results, I develop and calibrate a HANK model tailored to the U.S. economy. The model...