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Fiscal sustainability and policy implications for the euro area.

Balassone, F.; Cunha, J.; Langenus, G.; Manzke, B.; … - Banque de France - 2008

In this paper we examine the sustainability of euro area public finances against the backdrop of population ageing. We critically assess the widely used projections of the Working Group on Ageing Populations (AWG) of the EU's Economic Policy Committee and argue that ageing costs may be higher...

Persistent link: https://www.econbiz.de/10005036192

A Pitfall with DSGE-Based, Estimated, Government Spending Multipliers

Fève, P.; Matheron, J.; Sahuc, J.G. - Banque de France - 2012

This paper examines issues related to the estimation of the government spending multiplier (GSM) in a Dynamic Stochastic General Equilibrium context. We stress a potential source of bias in the GSM arising from the combination of Edgeworth complementarity/substitutability between private...

Persistent link: https://www.econbiz.de/10010544322

On the Size of the Government Spending Multiplier in the Euro Area

Fève, P.; Sahuc, J-G. - Banque de France - 2015

This article addresses the existence of a wide range of estimated government spending multipliers in a dynamic stochastic general equilibrium model of the euro area. Our estimation results and counterfactual exercises provide evidence that omitting the interactions of key ingredients at the...

Persistent link: https://www.econbiz.de/10011166880

Procyclical Debt as Automatic Stabilizer.

Wesselbaum, D. - Banque de France - 2013

This paper shows that government debt creates a so far neglected wealth effect that has sizable effects on business … type of shock and contribute to macroeconomic stability. We provide evidence for the United States that debt moves … policy. We show that procyclical debt generates smaller fluctuations compared to countercyclical debt. The striking …

Persistent link: https://www.econbiz.de/10010816023

Consumption-Wealth Ratio and Housing Prices.

Dubecq, S.; Ghattassi, I. - Banque de France - 2009

This paper shows, from the consumer budget constraint, that the consumption spending and the different components of total wealth, i.e. financial, housing and human wealths, are cointegrated and that deviations from the common trend cahy is a proxy for the consumption-wealth ratio that should...

Persistent link: https://www.econbiz.de/10008503200

Fiscal Sustainability in the Presence of Systemic Banks: the Case of EU Countries.

Bénassy-quéré, A.; Roussellet, A. - Banque de France - 2013

We provide a first attempt to include o?-balance sheet, implicit insurance to SIFIs into a consistent assessment of fiscal sustainability, for 27 countries of the European Union. We first calculate tax gaps a la Blanchard (1990) and Blanchard et al. (1990). We then introduce two alternative...

Persistent link: https://www.econbiz.de/10010631358

Fiscal Devaluation and Structural Gaps.

Langot, F.; Patureau, L.; Sopraseuth, T. - Banque de France - 2014

The paper characterizes the optimal tax scheme in an open economy with structural inefficiencies on the labor market and on government size. On analytical grounds first, we show that the economy can use fiscal revaluation to exploit the terms of trade externality and to dampen the impact of an...

Persistent link: https://www.econbiz.de/10010933105

Austerity Plans and Tax Evasion : Theory and Evidence from Greece.

Pappadà, F.; Zylberberg, Y. - Banque de France - 2015

The unprecedented tax hikes implemented in Greece in 2010 generated a much lower than expected increase in tax revenues. In this paper, we document a new stylized fact explaining this gap: the strong increase of tax evasion. We then analyze the response of the economy to tax hikes in a stylized...

Persistent link: https://www.econbiz.de/10011250895

Commodity price volatility and tax revenue: Evidence from developing countries.

Ehrhart, H.; Guerineau, S. - Banque de France - 2013

In this paper we assess the impact of commodity price volatility on tax revenues, while existing works were concentrated on its effect on economic growth. Our empirical analysis is carried out on 80 developing countries over 1980-2008. We compute country-specific indices which measure the...

Persistent link: https://www.econbiz.de/10010610698

How does Fiscal Consolidation Impact on Income Inequality?

L, Agnello.; R, M. Sousa. - Banque de France - 2012

In this paper, we assess the impact of fiscal consolidation on income inequality. Using a panel of 18 industrialized countries from 1978 to 2009, we find that income inequality significantly rises during periods of fiscal consolidation. In addition, while fiscal policy that is driven by spending...

Persistent link: https://www.econbiz.de/10010815971