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The Effects of Public Spending Externalities

Ercolani, Valerio; Azevedo, João Valle e - Banco de Portugal - 2012

We take to the data an RBC model with two salient features. First, we allow government consumption to directly affect the marginal utility of consumption. Second, we allow public capital to affect the productivity of private factors. On the one hand, private and government consumption are...

Persistent link: https://www.econbiz.de/10010552210

Output effects of a measure of tax shocks based on changes in legislation for Portugal

Pereira, Manuel Coutinho; Wemans, Lara - Banco de Portugal - 2013

This paper develops a new measure of quarterly discretionary tax shocks for Portugal that result from changes in legislation, following the narrative approach. It covers the years from 1996 to 2012 and was based on a comprehensive analysis of tax policy measures taken in the course of this...

Persistent link: https://www.econbiz.de/10010833991

The Output Effects of (Non-Separable) Government Consumption at the Zero Lower Bound

Ercolani, Valerio; Azevedo, João Valle e - Banco de Portugal - 2013

We investigate the reaction of output to government spending shocks at the zero lower bound (ZLB) on the nominal interest rate when government and private consumption are non-separable in preferences. In particular, substitutability between private and government consumption significantly...

Persistent link: https://www.econbiz.de/10010833992

A New Measure of Fiscal Shocks Based on Budget Forecasts and its Implications

Pereira, Manuel Coutinho - Banco de Portugal - 2009

This paper develops a new measure of US fiscal policy shocks that intends to avoid the anticipation problem affecting conventional measures, being also arguably free from endogeneity. The shocks are intended to capture changes to the component of anticipated fiscal policy that is exogenous to...

Persistent link: https://www.econbiz.de/10008524235

Time-varying fiscal policy in the U.S.

Pereira, Manuel Coutinho; Lopes, Artur Silva - Banco de Portugal - 2010

To investigate time heterogeneity in the e¤ects of fiscal policy in the U.S., we use a non-recursive, Blanchard and Perotti-like structural VAR with time-varying parameters, estimated through Bayesian simulation over the 1965:2-2009:2 period. Our evidence suggests that fiscal policy has lost...

Persistent link: https://www.econbiz.de/10008680470

Fiscal Institutions and Public Spending Volatility in Europe

Albuquerque, Bruno - Banco de Portugal - 2010

fiscal institutions on public spending volatility for a panel of 25 EU countries over the 1980-2007 period. The dependent … variable is the volatility of discretionary fiscal policy, which does not represent reactions to changes in economic conditions …. Our baseline results thus give support to the strengthening of institutions to deal with excessive levels of discretion …

Persistent link: https://www.econbiz.de/10008642456

Fiscal stimulus and exit strategies in a small euro area economy

Almeida, Vanda; Castro, Gabriela Lopes de; Félix, … - Banco de Portugal - 2010

This article is focused on fiscal stimulus and exit strategies in a small euro area economy. The analysis is based on a New-Keynesian general equilibrium model with non-Ricardian features introduced in Almeida, Castro and Félix (2010). We define a benchmark fiscal stimulus and, conditional on...

Persistent link: https://www.econbiz.de/10008691866

Unpleasant debt dynamics: Can fiscal consolidations raise debt ratios?

Castro, Gabriela Lopes de; Félix, Ricardo Mourinho; … - Banco de Portugal - 2015

Using PESSOA, a medium-scale DSGE model for a small euro-area economy, we evaluate how scal adjustments impact short- and medium-term debt dynamics and output for alternative policy options, and budgetary and economic conditions. Fiscal djustments may increase the public debt-to-GDP ratio in the...

Persistent link: https://www.econbiz.de/10011228163

Inside PESSOA - A Detailed Description of the Model

Almeida, Vanda; Castro, Gabriela Lopes de; Félix, … - Banco de Portugal - 2013

This article presents a detailed description of PESSOA - Portuguese Economy Structural Small Open Analytical model. PESSOA is a dynamic general equilibrium model that can be applied to any small economy integrated in a monetary union. The main theoretical reference behind its structure is...

Persistent link: https://www.econbiz.de/10010728034

Optimal Fiscal and Monetary Policy: Equivalence Results

Correia, Isabel Horta; Nicolini, Juan Pablo; Teles, Pedro - Banco de Portugal - 2003

In this paper, we analyze the implications of price setting restrictions for the conduct of cyclical fiscal and monetary policy. We consider an environment with monopolistic competitive firms, a shopping time technology, prices set one period in advance, and government expenditures that must be...

Persistent link: https://www.econbiz.de/10008520399