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    Essays on Fiscal Policy

    Cover for Essays on Fiscal Policy
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    Creator
    Juarros, Pedro Francisco
    Advisor
    Huggett, Mark
    Abstract
    The central question when evaluating the effects of government spending on GDP, is whether the fiscal multiplier is greater or lower than 1, or equivalently, the direction and strength of fiscal spillovers. I study the role of firm size heterogeneity and credit market imperfections for firms' financing decisions on the size of the fiscal multiplier. Specifically, this dissertation asks: How does firm size heterogeneity affect the fiscal multiplier? Are fiscal spillover heterogeneous by firm size?
     
    I show that the local fiscal multiplier increases with the share of small firms, implying multipliers of 0.95-2.15 in the interquantile range. At micro level, I document positive spillovers for small firms and neutral for large firms. Small firms increase operating revenues, investment and financing relative to large firms after a local fiscal stimulus. I interpret these findings with a two-firm open economy New Keynesian model with the financial accelerator mechanism. The model implies that a higher share of small firms also increases the national fiscal multiplier if monetary policy does not respond aggressively to fiscal shocks.
     
    Description
    Ph.D.
    Permanent Link
    http://hdl.handle.net/10822/1062325
    Date Published
    2021
    Subject
    Financial Accelerator; Firm size; Fiscal stimulus; Spillovers; Economics; Economics;
    Type
    thesis
    Publisher
    Georgetown University
    Extent
    77 leaves
    Collections
    • Graduate Theses and Dissertations - Economics
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      Three Essays on Fiscal Policy and Government Production 

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      This research investigates government production function, explores its dynamic properties and studies the effects of fiscal policy implemented through government production channels. The first chapter estimates the ...
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    Georgetown University Seal
    ©2009 - 2022 Georgetown University Library
    37th & O Streets NW
    Washington DC 20057-1174
    202.687.7385
    digitalscholarship@georgetown.edu
    Accessibility