Why Is the Government Spending Multiplier Larger at the Zero Lower Bound ? Not ( Only ) Because of the Zero Lower Bound

@inproceedings{RoulleauPasdeloup2014WhyIT,
  title={Why Is the Government Spending Multiplier Larger at the Zero Lower Bound ? Not ( Only ) Because of the Zero Lower Bound},
  author={Jordan Roulleau-Pasdeloup},
  year={2014}
}
  • Jordan Roulleau-Pasdeloup
  • Published 2014
I develop a New Keynesian model with search and matching frictions, in which the government buys goods produced by the firms. I solve the non-linear model globally and examine the magnitude of government spending multipliers in and out of the ZLB. I distinguish the cases of Nash-bargained and rigid real wages. The model with Nash-bargained wages gives… CONTINUE READING