Showing 1 - 10 of 10
Empirical studies support the hysteresis hypothesis that recessions have a permanent effect on the level of output. We analyze the implications of hysteresis for fiscal policy in a DSGE model. We assume a simple learning-by-doing mechanism where demand-driven changes in employment can affect the...
Persistent link: https://www.econbiz.de/10011583674
Using panel data of 17 OECD countries for 1980-2011, we find that the distributional consequences of fiscal consolidations depend significantly on the level of private indebtedness. Austerity leads to a strong and persistent increase in income inequality during periods of private debt overhang....
Persistent link: https://www.econbiz.de/10011595946
We estimate the effect of government spending shocks on the US economy with a time-varying parameter vector autoregression. The recent Great Recession period appears to be characterized by uniquely large impulse responses of output to fiscal shocks. Moreover, the particularity of this period is...
Persistent link: https://www.econbiz.de/10011902274
We estimate the dynamic effects of government spending shocks, using time-varying volatility in US data modeled through a Markov switching process. We find that the average government spending multiplier is significantly and persistently above one, driven by a crowding-in of private consumption...
Persistent link: https://www.econbiz.de/10012294299
This paper evaluates the temporary VAT reduction introduced by the German government over the 3Q2020:4Q2020 as a controversial part of the COVID-19 stimulus package. Critics argue that VAT reductions are ineffective because of limited pass-through to consumer prices and during lockdown....
Persistent link: https://www.econbiz.de/10013198546
This paper characterizes capital taxation and public debt policy in a quantitative macroeconomic model with an impatient government and uncertainty. The government has access to linear taxes on capital and labor, and to non-state-contingent bonds. Government impatience generates positive and...
Persistent link: https://www.econbiz.de/10011749975
We study the determinants of sovereign bond yield spreads across 10 EMU countries between Q1/1999 and Q1/2010. We apply a semiparametric time-varying coefficient model to identify, to what extent an observed change in the yield spread is due to a shift in macroeconomic fundamentals or due to...
Persistent link: https://www.econbiz.de/10010285746
The standardisation of the European systems of national accounts has progressed significantly in recent years. Some room for interpretation remains in regard to some accounting standards, the periodicity of the data, and the quality of the forecasts of budget deficits. Yet national accounts data...
Persistent link: https://www.econbiz.de/10010260646
We analyse the effectiveness of fiscal policy rules for business cycle stabilisation in a monetary union using a quarterly macro-econometric model of Germany. The simulations compare a deficit target and an expenditure target under a range of supply, demand and fiscal shocks. Their effects are...
Persistent link: https://www.econbiz.de/10010260720
We estimate the political economy determinants of budget deficit forecast errors. Since the adoption of the Stability Pact, Eurozone governments have manipulated forecasts before elections. The political orientation and the institutional design of governments also affects the quality of forecasts.
Persistent link: https://www.econbiz.de/10010260865