Schedule: 12:30-14:00
Room: MB405
Paper (in the attachement section): "New Keynesian versus Old Keynesian Government Spending Multipliers" by John F. Cogan, Tobias Cwik, John B. Taylor, V. Wieland, February 2009
Speaker: Franck Portier
Who will not be there: Sumudu, Martial
This first session will be devoted to a presentation of the theme, a quick survey of what we know and what we will study, and to the reading of a very topical paper on the Obama American Recovery and Reinvestment Act.
Reading list
[A section on the Political Economy of fiscal policy will be added]
[Papers with roman numbers should be read]
1. Theory
1.1. Budget Deficits and Fiscal Policy
I-Barro, Robert (1974), "Are government bonds net wealth?" Journal of Political Economy, 82: 1095-1117.
II- Olivier J. Blanchard Debt, Deficits, and Finite Horizons Debt, Deficits, and Finite Horizons The Journal of Political Economy, Vol. 93, No. 2 (Apr., 1985), pp. 223-247
III-Robert E. Lucas Jr., Nancy L. Stokey Optimal fiscal and monetary policy in an economy without capital Journal of Monetary Economics, Volume 12, Issue 1, 1983, Pages 55-93
+ (optional)
-Barro, Robert (1979), "On the determination of public debt" Journal of Political Economy, 87: 940-971.
-Bohn, H. (1988), "Why do we have nominal debt?", Journal of Monetary Economics, 21, Issue 1, 127-140.
-Bohn, H. (1990), "Tax Smoothing with Financial Instruments", American Economic Review, 80:1217-30.
-Calvo, G. (1988), "Servicing the public debt: the role of expectations", American Economic Review, 78:647-61.
-Missale, A. and Blanchard, O. (1994), "The debt burden and the debt maturity", American Economic Review, 84, no.1, March.
1.2. Fiscal Policy and Inflation
IV-Sargent, Thomas J., and Neil Wallace (1981): "Some Unpleasant Monetarist Arithmetic," Federal Reserve Bank of Minneapolis Quarterly Review 5: 1-17.
V- Sims, Christopher A. (1994): “A Simple Model for the Determination of the Price Level and the Interaction of Monetary and Fiscal Policy,” Economic Theory, vol. 4, 381-399.
VI-Woodford 1995. Price level determinacy without control of a monetary aggregate, Carnegie-Carnegie-Rochester Conference Series on Public Policy 43 (December):1–46.
+ (optional)
- Explaining the Fiscal Theory of the Price Level, by Kocherlakota and Phelan of the Minneapolis Fed
- Leeper, Eric (1991): “Equilibria under Active and Passive Monetary Policies,” Journal of Monetary Economics 27, 129-147.
- Woodford, Michael (1996): “Control of the Public Debt: A Requirement for Price Stability,” NBER WP#5684.
-Davig, Troy and Eric Leeper (2005): “Fluctuating Macro Policies and the Fiscal Theory,”
mimeo.
2. Quantitative Work
VII-Chari, V. V., and P. Kehoe. "Optimal Fiscal and Monetary Policy." Federal Reserve Bank of Minneapolis Staff Report 251 (July 1998).
VIII-Baxter, M., and R. King. "Fiscal Policy in General Equilibrium." American Economic Review 83, no. 3 (June 1993): 315-334.
IX-Jordi Galí, D. Lopez-Salido and Javier Vallés'Understanding the Effects of Government Spending Shocks on Consumption'' , Journal of the European Economic Association, vol. 5 (March 2007), pp. 227-270.
X-John F. Cogan, Tobias Cwik, John B. Taylor, V. Wieland, New Keynesian versus Old Keynesian Government Spending Multipliers, February 2009
3. Empirical Work
XI- Blanchard, Olivier and Roberto Perotti (2002), “An Empirical Characterization of the Dynamic Effects of Changes in Government Spending and Taxes on Output,” Quarterly Journal of Economics, vol CXVII, issue 4, 1329-1368.
XII- Mountford, Andrew, and Harald Uhlig, 2005, “What are the Effects of Fiscal Policy Shocks?”, SFB Discussion Paper no. 2005-039, Humboldt University.
XIII- Ramey, Valerie A., 2008, “Identifying Government Spending Shocks: It’s All in the Timing”, manuscript, University of California, San Diego.
XIV- Romer, Christina D., and David H. Romer, 2008a, “A Narrative Analysis of Postwar Tax Changes”, manuscript, University of California, Berkeley.
XV- Karel Mertens and Morten Ravn, Empirical Evidence on the Aggregate Effects of Anticipated and Unanticipated U.S. Tax Policy Shocks. (July 2009 version), Also available as CEPR Discussion Paper 7370
+ (optional)
- Fatás, Antonio and Ilian Mihov (2001), “The Effects of Fiscal Policy on Consumption and Employment: Theory and Evidence,” INSEAD, mimeo.
- Burnside, Craig, Martin Eichenbaum and Jonas D. M. Fisher, 2004, “Fiscal Shocks and Their Consequences”, Journal of Economic Theory 115, 89-117.
- Perotti, Roberto, 2007, “Estimating the Effects of Fiscal Policy in OECD Countries”, forthcoming, NBER Macroeconomics Annual.
- Karel Mertens and Morten Ravn, Understanding the Aggregate Effects of Anticipated and Unanticipated Tax Policy Shocks. (March 2009 version),
- Karel Mertens and Morten Ravn, Measuring the Impact of Fiscal Policy in the Face of Anticipation: a Structural VAR Approach,forthcoming in The Economic Journal