HAFiscal-Abstract.txt

  Using a heterogeneous agent model calibrated to match spending dynamics over four years following an income shock (\cite{fagereng-mpc-2021}), we assess the effectiveness of three fiscal stimulus policies implemented during recent recessions.  Unemployment insurance (UI) extensions are the ``bang for the buck'' winner when the metric is effectiveness in boosting utility.  Stimulus checks are second-best and have two advantages (over UI): they arrive faster, and are scalable.  A temporary (two-year) cut in wage taxation is considerably less effective than the other policies and has negligible effects in the version of our model without a multiplier.