0% 1.0% 1.1% 1.5% 1.2% 0% 1.5% 0% Growth Rate (p.a.) Population Growth Rate (p.a.) No No Yes (small) (small)

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1 Effects of Fiscal Stimulus in Structural Models Coenen, Erceg, Freedman, Furceri, Kumhof, Lalonde, Laxton, Lindé, Mourougane, Muir, Mursula, de Resende, Roberts, Roeger, Snudden, Trabandt, in't Veld Web Appendix: Key Model Parameters Long Run Growth Rates and Interest Rates Model Frequency Quarterly Quarterly Quarterly Annual Quarterly Quarterly Quarterly Quarterly Technology 0% 1.0% 1.1% 1.5% 1.2% 0% 1.5% 0% Growth Rate (p.a.) Population Growth Rate (p.a.) Gross Real Interest Rate (p.a.) UIP-Related Risk Premium Government Debt Risk Premium 0% 1.0% 1.1% (2010; varies over time) 1.0% 0.4% 0% 0.2% 0% 3% 3% Endogenous 3% 2% 3% 2% 2% (no steady state value) - Yes Yes No No Yes Yes Yes (small) (small) (small) (small) (small) No No No No No No Yes No (3 bp per 1 pp gov. debt) Monetary Policy Rule Coefficients Lagged Int. Rate Long-Run Weight in US, RC; on CPI Inflation 2.5 EU; 1.9 JA Contemporaneous or Lead on CPI Inflation 1-year-ahead (yr-on-yr (yr-on-yr (yr-on-yr (yr-on-yr (qu-on-qu 1-quarterahead (qu.-on-qu. Weighted average of cont. and 1- year-ahead

2 Inflation Target Weight on Output Gap Weight on GDP Growth Weight on Nominal Exchange Rate Targeting or Instrument Rule Output Gap Coefficient Debt Gap Coefficient Deficit Gap Coefficient 0% 2.5% US 1% JA 2% elsewhere 2% 2.5% US 1% JA 2% elsewhere 2% 2% 2% 2% in US; 0 elsewhere in AS, 0 elsewhere in AS, 0 elsewhere Fiscal Rule Coefficients - Instrument rule. Instrument rule. Targeting rule. Instrument Instrument rule. Instrument Instrument rule. Lump-sum Labor income Deficit-to- rule. Lump-sum rule. Labor income taxes respond to taxes respond, GDP ratio Lump-sum taxes Labor income taxes respond, debt-to-gdp with smoothing, responds to taxes respond respond to debtto-gdp taxes respond with smoothing, ratio. to deficit- and/or output gap. to deficit. ratio. to deficit- to deficit- and/or debt-to-gdp ratio Lump-sum and/or debt-to- debt-to-gdp taxes adjust US; 0.49 EU; 0.33 JA; 0.25 AS; 0.30 RC (change in tax rate) (change in tax rate) GDP ratio. ratio (debt) (change in debt) 0.05 (change in debt)

3 Unconstrained Households Planning Horizon Avg. Remaining Working Life Intertemporal Elasticity of Substitution in Consumption Habit Persistence in Consumption Labor Supply Elasticity Share of Liquidity- Constrained or Hand-to-Mouth Households Share of Credit- Constrained Households Households and Household Preferences Infinite Infinite Infinite 20 years Infinite Infinite Infinite Infinite years (implicit) Errorcorrection coefficient (adjustment cost framework): (+ labor habit) AS; 0.15 US; 0.20 CA, JA; 0.25 elsewhere n.a EA 0.33 US 0.40 (nondurable consumption only) 0.5 AS, RC; 0.25 elsewhere

4 Elasticities of Substitution Between Capital and Labor tradables, nontradables, gasoline. 0.6 oil, commodities. Capital/Labor and Oil Reserves in Oil Production Capital/Labor and Commodities Reserves in Commodities Production Imports from Different Regions (for models with >2 regions) final goods. 3 oil and commodities Domestic and Imported Intermediate Goods Tradable and Nontradable Intermediates Domestic and Imported Final Goods - 10 oil; 5 commodities; 1.5 final goods

5 Nontradables Intermediates Prices Tradables Intermediates Prices Steady State Gross Markups US; EA, NEA; - CA; 1.41 JA; 1.20 U;S 1.25 AS; RoW RC; 1.23 CX US; 1.2 CA; JA; 1.14 AS; 1.3 RC; 1.18 CX Nominal Wages US; 1.2 CA; 1.25 JA; 1.16 AS; 1.3 RC; 1.3 CX Final Goods Prices (+1.05 for retailing) Imported Goods (Final & Prices Intermediate) (for pricing-tomarket) Leverage (Debt / Net Worth) External Finance Premium (p.a.) Financial Sector % % % %

6 Labor Income / GDP 53% (adjusting for the gross markup) Nontradables Labor Income / GDP Tradables Labor Income / GDP Nontradables Production / Total Production Depreciation Rate of Public Capital (p.a.) Steady State Factor Shares and Depreciation Rates 70% US; 70% 60%; 65% 70% 66% 54% 62% CA; (Business 54% AS 64% JA; sector) (adjusting for 51% AS; the gross 69% RC; markup) 60% CX - 78% US; 72% CA; 72% JA; 59% AS; 77% RC; 77% CX - 66% US; 55% CA; 56% JA; 47% AS; 63% RC; 50% CX % US; 50.5% CA; 54.6% JA; 35.0% AS; 64.9% RC; 41.5% CX - 66%; 60% AS % %; 48% AS - 70% 66% 54% - 50% % EA; 53% NEA; 61% US; 51% RoW - 1% - 4% 1.25% 10% 5% - -

7 Depreciation Rate of Private Capital (p.a.) Output Elasticity w.r.t. Public Capital 10% 8% Housing: 1.5%; Cons. Durables: 22%; High-tech: 32%; NRS: 2.7%; Other Equipment: 13% (2010) 10% 10% 10% 6% 12% Quantity Adjustment Costs Labor Demand by No Yes Yes No No No Yes No Firms Consumption Spending No No Yes Yes No No No No Investment Spending Yes Yes Yes Yes Yes Yes Yes Yes Retail Sales Yes - Yes (transaction - - costs related to money holdings) Intermediate Goods No Yes No Yes - Yes No No Imported Inputs Final Goods Imported Inputs No Yes No Yes - No No No

8 Price/Wage Adjustment Costs - Calvo delta or Adjustment Cost Coefficient OECD NAWM QUEST SIGMA Fiscal Calvo or Adjustment Costs Calvo Adjustment Adjustment Adjustment Calvo Calvo Adjustment Calvo Costs Costs Costs Costs Prices, Inflation (indexation or infl. adj. costs), or Hybrid (price indexation=0.5; wage indexation=0.5) Wage Stickiness Coefficients CA; 1050 JA, RC; 800 elsewhere Tradables Intermediates Price Stickiness Coefficients Nontradables Intermediates Price Stickiness Coefficients Imported Intermediate Goods Price Stickiness Coefficients (pricing-to-market) Imported Final Goods Price Stickiness Coefficients (pricing-to-market) Final Goods Price Stickiness Coefficients JA, RC; 700 elsewhere - 60 EU; 40 elsewhere - 60 EU; 40 elsewhere JA, RC; 700 elsewhere - 60 EU; 40 elsewhere EU; 40 US; 4 elsewhere EU; 40 US; 4 elsewhere EU; 40 elsewhere Real wage persistence: 0.73 Wage setting inertia: 0.77 Hybrid (price indexation=0.5; wage indexation=0.75) - Domestic sales: 0.90 EA, 0.83 US Foreign sales: 0.30 Hybrid (price indexation=0.75; wage indexation=0.75) Domestic sales: 0.85 Foreign sales: EA, NEA; - 16 US, RoW