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- Title
Policy multipliers under an interest rate peg of deterministic versus stochastic duration.
- Authors
Carlstrom, Charles T.; Fuerst, Timothy S.; Paustian, Matthias
- Abstract
The article focuses on the fiscal multiplier under a stochastic exit averages the deterministic multipliers, a convex function of the duration of the stimulus at constant interest rates, across all possible durations. It also analyses that the exit from the interest rate peg is exogenous. It further analyses that the interest rate peg is invariant to the size of the increase in government spending.
- Subjects
INTEREST rates; GOVERNMENT spending policy; PUBLIC spending; PUBLIC finance; DEFICIT financing; ECONOMIC policy
- Publication
Bank of England Quarterly Bulletin, 2013, Vol 53, Issue 3, p281
- ISSN
0005-5166
- Publication type
Article