(Re)Evaluating recent macroeconomic policy in the US
University of Glasgow; Polytechnic of Porto; University of Porto
New Keynesian DSGE model with strategic monetary-fiscal policy interactions, distortionary taxation, geometric maturity structure for government debt, Markov-switching policy regimes, and zero lower bound constraint on interest rates
Calvo price setting with backward-looking rule of thumb pricing
Section 8.3, Panel D Fig. 8
Counterfactual: removing Trump-Biden fiscal stimulus; inflation 0.5pp lower than baseline by 2026