ANALYZING FISCAL POLICY USING A DSGE MODEL
DOI:
https://doi.org/10.5281/Keywords:
DSGE model, fiscal policy, fiscal multiplier, government expenditures, taxes, public debt, fiscal shock, monetary policy.Abstract
This thesis examines the methodological capabilities of Dynamic Stochastic General Equilibrium (DSGE) models in the analysis of fiscal policy. The main focus is placed on evaluating, within a general equilibrium framework, the effects of government expenditures, taxes, and fiscal shocks on output, consumption, investment, inflation, and public debt. Based on the studies of Smets and Wouters (2007), Galí, López-Salido, and Vallés (2007), Christiano, Eichenbaum, and Rebelo (2011), Coenen et al. (2012), Leeper, Traum, and Walker (2017), as well as research related to the IMF’s GIMF model, the thesis demonstrates that the fiscal multiplier depends on economic conditions, household behavior, and the monetary policy regime.
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