1.

Record Nr.

UNINA9910808879103321

Autore

Bayoumi Tamim A

Titolo

Mr Ricardo's great adventure : estimating fiscal multipliers in a truly intertemporal model / / prepared by Tamim Bayoumi and Silvia Sgherri

Pubbl/distr/stampa

[Washington, D.C.], : International Monetary Fund, IMF Institute, 2006

ISBN

1-4623-4677-4

1-4519-9541-5

1-283-51821-X

1-4519-8599-1

9786613830661

Edizione

[1st ed.]

Descrizione fisica

1 online resource (30 p.)

Collana

IMF working paper ; ; WP/06/168

Altri autori (Persone)

SgherriSilvia

Soggetti

Fiscal policy

Multiplier (Economics)

Lingua di pubblicazione

Inglese

Formato

Materiale a stampa

Livello bibliografico

Monografia

Note generali

"July 2006".

Nota di bibliografia

Includes bibliographical references.

Nota di contenuto

""Contents""; ""I. INTRODUCTION""; ""II. SOME THEORY""; ""III. SOME ESTIMATES""; ""IV. SOME ANALYSIS""; ""V. SOME CONCLUSIONS""; ""REFERENCES""

Sommario/riassunto

We estimate tax multipliers in a "Blanchard-Yaari" consumption model where Ricardian equivalence is broken because the private sector discounts the future at a faster rate than the real rate of interest. The model fits U.S. data since 1955 extremely well-entailing a discount wedge of around 20 percent a year and fiscal multipliers of 0.15-0.4-depending on the permanence of the change in taxes/transfers, and is much superior to one that assumes some consumers are fully Ricardian and others follow simple rules of thumb. The implied high private sector rate of discount has wide implications for policymakers.