<> "The repository administrator has not yet configured an RDF license."^^ . <> . . "Fiscal Stimulus In Expectations-Driven Liquidity Traps"^^ . "I study liquidity traps in a model where agents have heterogeneous expectations and finite planning horizons. Backward-looking agents base their expectations on\r\npast observations, while forward-looking agents have fully rational expectations. Liquidity traps that are fully or partly driven by expectations can arise due to pessimism of backward-looking agents. Only when planning horizons are finite, these liquidity traps can be of longer duration without ending up in a deflationary spiral. I further find that fiscal stimulus in the form of an increase in government spending or a cut in\r\nconsumption taxes can be very effective in mitigating the liquidity trap. A feedback mechanism of heterogeneous expectations causes fiscal multipliers to be the largest\r\nwhen the majority of agents is backward-looking but there also is a considerable fraction of agents that are forward-looking. Labor tax cuts are always deflationary\r\nand are not an effective tool in a liquidity trap."^^ . "2020-05" . . . "0683" . . . . . "Joep"^^ . "Lustenhouwer"^^ . "Joep Lustenhouwer"^^ . . . . . . "Fiscal Stimulus In Expectations-Driven Liquidity Traps (PDF)"^^ . . . "Lustenhouwer_2020_dp683.pdf"^^ . . . "Fiscal Stimulus In Expectations-Driven Liquidity Traps (Other)"^^ . . . . . . "indexcodes.txt"^^ . . . "Fiscal Stimulus In Expectations-Driven Liquidity Traps (Other)"^^ . . . . . . "lightbox.jpg"^^ . . . "Fiscal Stimulus In Expectations-Driven Liquidity Traps (Other)"^^ . . . . . . "preview.jpg"^^ . . . "Fiscal Stimulus In Expectations-Driven Liquidity Traps (Other)"^^ . . . . . . "medium.jpg"^^ . . . "Fiscal Stimulus In Expectations-Driven Liquidity Traps (Other)"^^ . . . . . . "small.jpg"^^ . . "HTML Summary of #28307 \n\nFiscal Stimulus In Expectations-Driven Liquidity Traps\n\n" . "text/html" . . . "330 Wirtschaft"@de . "330 Economics"@en . .