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α: calibrated so average coauthorship-adjusted count equals average raw count
type="main" xml:id="ecca12161-abs-0001"> <p>We study the size of government spending multipliers in a general equilibrium model with search and matching frictions in which we allow for different levels of household indebtedness. The main results are: (a) the presence of impatient households and private debt helps to generate government spending multipliers greater than 1; (b) as financial conditions worsen, the size of the government spending multiplier falls; (c) conversely, employment, vacancies and unemployment multipliers are larger in a credit crunch; (d) the model explains the observed pattern of responses of labour market variables, housing prices and private debt to a fiscal shock reasonably well.