In the past, industrial countries have tended to pursue countercyclical or, at worst, acyclical
fiscal policy. In sharp contrast, emerging and developing countries have followed procyclical …

In this paper, we argue for the importance of explicitly considering nonlinearities in
analyzing the behavior of the New Keynesian model with a zero lower bound (ZLB) of the …

In this paper, we use a dynamic stochastic general equilibrium model to examine the effects
of an expansion in government spending in a liquidity trap. If the liquidity trap is very …

With projections showing inflation heading back toward target and the labor market
continuing to improve, the Federal Reserve has begun to contemplate an increase in the …

Under conventional inflation targeting (IT), the lower bound on nominal interest rates gives
rise to a systematic downward bias in inflation that substantially reduces welfare. Using two …

This article studies the output and welfare effects of shocks to government spending in a
medium‐scale DSGE model. Our model considers both government consumption and …

When the policy rate is at the zero lower bound (ZLB), an increase in uncertainty regarding
the future path of exogenous shocks alters the conditional expectations of relevant prices …

This paper analyzes the fiscal and monetary policy responses to crises in Latin America over
the last 40 years. We argue that, on average, Latin American countries have" graduated" in …

Liquidity traps can be either fundamental or confidence-driven. In a simple, unified New
Keynesian framework, I provide the analytical condition for the latter's prevalence: enough …

This paper studies the state-dependent effects of shocks to tax rates. We begin with a
stylized model in which clean analytical expressions are available. The model predicts that a …