Varieties of Fiscal Stimulus: A Conflicting Claims Analysis
15 pages. This is the working paper version of "Varieties of Fiscal Stimulus," in Per Berglund and Matias Vernengo (eds) The Means to Prosperity: Fiscal Policy Reconsidered (Routledge: November 2005) ISBN: 0415701562 Please cite the published paper.
This paper explores the effects of fiscal policy in a conflicting claims economy where monetary policy follows a Taylor rule. Fiscal stimulus is decomposed into distinct vari- eties, depending on whether the initial effect is primarily on consumption or investment. Policy type proves important for the understanding of growth, unemployment, and the distribution of income.