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dc.contributor.authorMitra, Kaushik
dc.contributor.authorEvans, George W.
dc.contributor.authorHonkapohja, Seppo
dc.identifier.citationMitra , K , Evans , G W & Honkapohja , S 2019 , ' Fiscal policy multipliers in an RBC model with learning ' , Macroeconomic Dynamics , vol. 23 , no. 1 , pp. 240-283 .
dc.identifier.otherPURE: 246755262
dc.identifier.otherPURE UUID: ae6e3e18-6731-4aa0-a2d0-bb70c214ef76
dc.identifier.otherScopus: 85023186978
dc.identifier.otherWOS: 000461045600009
dc.descriptionThis work was supported by ESRC Grant RES-062-23-2617 and National Science Foundation Grant no. SES-1025011.en
dc.description.abstractUsing the standard real business cycle model with lump-sum taxes, we analyze the impact of fiscal policy when agents form expectations using adaptive learning rather than rational expectations (RE). The output multipliers for government purchases are significantly higher under learning, and fall within empirical bounds reported in the literature, which is in sharp contrast to the implausibly low values under RE. Positive effects of fiscal policy are demonstrated during times of economic stress like the recent Great Recession. Finally it is shown how learning can lead to consumption and investment dynamics empirically documented during some episodes of “fiscal consolidations.”
dc.relation.ispartofMacroeconomic Dynamicsen
dc.rightsCopyright © 2016, Cambridge University Press. This work is made available online in accordance with the publisher’s policies. This is the author created, accepted version manuscript following peer review and may differ slightly from the final published version. The final published version of this work is available at
dc.subjectGovernment purchasesen
dc.subjectOutput multiplieren
dc.subjectFiscal consolidationen
dc.subjectHB Economic Theoryen
dc.titleFiscal policy multipliers in an RBC model with learningen
dc.typeJournal articleen
dc.contributor.institutionUniversity of St Andrews.School of Economics and Financeen
dc.description.statusPeer revieweden

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