When is the Government Transfer Multiplier Large?

Giambattista, Eric ; Pennings, Steven

World Bank, Washington, DC

关键词: TRANSFERS;    MONETARY MULTIPLIER;    AGGREGATE DEMAND;    INFLATION;   

DOI  :  10.1596/1813-9450-8184
RP-ID  :  WPS8184

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Transfers to individuals were a largerpart of the 2009 U.S. stimulus package than governmentpurchases. Using a two-agent New Keynesian model, this papershows analytically that the multiplier on targeted transfersto financially constrained households is (i) larger than thepurchase multiplier if the zero lower bound (ZLB) binds, and(ii) is more sensitive to the degree of monetaryaccommodation of inflation. Targeted transfers provide thesame boost to demand as purchases, but lower aggregatesupply relative to purchases, as those receiving transferswant to work less. When the aggregate demand curve inverts,such as when the zero lower bound binds, the extra inflationfrom lower supply boosts the multiplier. This result alsoholds quantitatively in a medium-scale version of the model.