| Full text | |
| Author(s): |
Guimaraes, Bernardo
[1]
;
Machado, Caio
Total Authors: 2
|
| Affiliation: | [1] Sao Paulo Sch Econ FGV, Rua Itapeva 474, Sao Paulo, SP - Brazil
Total Affiliations: 1
|
| Document type: | Journal article |
| Source: | ECONOMIC JOURNAL; v. 128, n. 615, p. 2785-2811, NOV 2018. |
| Web of Science Citations: | 1 |
| Abstract | |
This article studies stimulus policies in a simple macroeconomic model featuring a dynamic coordination problem that arises from demand externalities and fixed costs of investment. In times of low economic activity, firms face low demand and hence have lower incentives for investing, which reinforces their low-demand expectations. In a benchmark case with no shocks, the economy might get trapped in a low-output regime and a social planner would be particularly keen to incentivise investment at times of low economic activity. However, this result vanishes once shocks are considered. (AU) | |
| FAPESP's process: | 13/22873-6 - Coordination failures and stimulus policies |
| Grantee: | Caio Henrique Machado |
| Support Opportunities: | Scholarships abroad - Research Internship - Doctorate |
| FAPESP's process: | 12/23222-6 - Coordination failures, crisis and economic policy |
| Grantee: | Caio Henrique Machado |
| Support Opportunities: | Scholarships in Brazil - Doctorate |