This research analyzes efficacy of the macroeconomic policies
and the role of policymakers to deal with a recessionary case. In
particular, it focuses on the instruments policymakers have in hand to
stimulate the economic activity. It does the quantitative multiplier
analysis for economies with various forms of financial market
imperfections to provide a greater degree of realism into macroeconomic
modeling. The first chapter analyzes efficacy of a fiscal policy tool, a
tax cut in particular, in a liquidity trap scenario where monetary
expansion is ineffective. It basically answers a question, as to when
the zero-lower-bound is binding and the conventional monetary policy is
not working, whether the discretionary fiscal policy is really
ineffective as has recently been argued. The second chapter focuses on
unconventional monetary policy in a closed economy and researches a
question as to whether certain assumptions regarding constraints and
rigidities amplify or mitigate the macroeconomic or real effects of
unconventional monetary policy. The third chapter examines the
macroeconomic effects of a social security reform. It analyzes
contributions from different forms of changes; quantifies the
macroeconomic implications of various reforms. Scenario analysis reveal
positive effects for labor supply, capital stock and output to the
reform implemented.