A carregar...
Publicação
Asset liquidity and fiscal consolidation programs
| Nome: | Descrição: | Tamanho: | Formato: | |
|---|---|---|---|---|
| 963.48 KB | Adobe PDF |
Autores
Orientador(es)
Resumo(s)
We argue that the relationship between wealth inequality and fiscal multipliers depends crucially
on the type of fiscal experiment used as well as on the measure of the wealth distribution.
We calibrate an incomplete-markets, overlapping generations model to different European
economies and use Household Finance and Consumption Survey (HFCS) data to compare fiscal
multipliers when models are calibrated to match the distribution of liquid vs. net wealth. We
find a negative relationship between fiscal multipliers and wealth inequality when considering
fiscal consolidation programs, in contrast to fiscal expansions experiments which are standard in
the literature. The underlying mechanism relies on the relationship between the distribution of
wealth and the share of credit constrained agents. We examine the role of households’ balance
sheet compositions regarding asset liquidity and find that when calibrating the model to match
liquid wealth, the relationship between wealth inequality and fiscal multipliers is much stronger.
Descrição
Palavras-chave
Fiscal consolidation Wealth inequality Fiscal mltipliers Consumption smoothing hypothesis