DSGE
VIP Member
- Dec 24, 2011
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Except that doesn't consider the counter-factual that the Federal Reserve would have done more monetary stimulus...
The Fed effectively does inflation targeting (it's not in the mandate but they've announced that they aim for an inflation rate of about 2 percent), and when you have an inflation targeting central bank the fiscal multiplier is roughly zero.
The Fed effectively does inflation targeting (it's not in the mandate but they've announced that they aim for an inflation rate of about 2 percent), and when you have an inflation targeting central bank the fiscal multiplier is roughly zero.