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Revisiting the Narrative Approach of Estimating Tax Multipliers
Hebous, Shafik; Zimmermann, Tom - CESifo - 2014
A number of recent studies regress a “narratively” identified measure of a macroeconomic shock directly on an outcome variable. In this note, we argue that this approach can be viewed as the reduced-form regression of an instrumental variable approach in which the narrative time series is...
Persistent link: https://www.econbiz.de/10010948895
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Government Spending Shocks and the Multiplier: New Evidence from the U.S. Based on Natural Disasters
Yang, Weonho; Fidrmuc, Jan; Ghosh, Sugata - CESifo - 2012
, the expenditure associated with military build-ups affects primarily the defense sector so that the resulting multiplier … powerful instrument for identifying government spending shocks. Furthermore, we show that the multiplier pertaining to non …-defense government spending is higher than the defense-spending multiplier estimated in the literature using military build-ups. …
Persistent link: https://www.econbiz.de/10010877863
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Political Competition and the Limits of Political Compromise
Cunha, Alexandre B.; Ornelas, Emanuel - CESifo - 2014
We consider an economy where competing political parties alternate in office. Due to rent-seeking motives, incumbents have an incentive to set public expenditures above the socially optimum level. Parties cannot commit to future policies, but they can forge a political compromise where each...
Persistent link: https://www.econbiz.de/10010757724
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Fiscal Policy Reaction to the Cycle in the OECD: Pro- or Counter-Cyclical?
Egert, Balazs - CESifo - 2012
This paper analyses the reaction of fiscal policy to the cycle in OECD countries. The results suggest that while overall government balances were counter-cyclical in the past and more so in economic downturns than in upswings, discretionary fiscal policy was neutral on average. However,...
Persistent link: https://www.econbiz.de/10010540250
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Appropriate Fiscal Policy over the Business Cycle: Proper Stimulus Policies Can Work
Graves, Philip E. - CESifo - 2010
Fiscal policy has become quite controversial in the post-Keynesian era, the debate over the Obama stimulus package being a contentious recent example. Some pundits go so far as to take the position that macroeconomic theory has failed to meaningfully progress in terms of providing useful...
Persistent link: https://www.econbiz.de/10008498997
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Do Government Purchases Affect Unemployment?
Holden, Steinar; Sparrman, Victoria - CESifo - 2011
We investigate empirically the effect of government purchases on unemployment in 20 OECD countries, for the period 1960-2007. Compared to earlier studies we use a data set with more variation in unemployment, and which allows for controlling for a host of factors that influence the effect of...
Persistent link: https://www.econbiz.de/10009147743
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The 2008 Financial Crisis and Taxation Policy
Hemmelgarn, Thomas; Nicodème, Gaëtan J.A. - CESifo - 2010
The 2008 financial crisis is the worst economic crisis since the Great Depression of 1929. It has been characterised by a housing bubble in a context of rapid credit expansion, high risk-taking and exacerbated financial leverage, leading to deleveraging and credit crunch when the bubble burst....
Persistent link: https://www.econbiz.de/10008534034
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Searching for Keynes: An Essay on the Political Economy of Fiscal Policy, with Application to Canada, 1870-2000 - revised version
Winer, Stanley L.; Ferris, J Stephen - CESifo - 2003
Keynes' General Theory (1936) is arguably one of the most important books of the twentieth century. His ideas for stabilizing the aggregate economy have profoundly influenced economic theory as well as popular opinion about what governments can and should do with respect to the business cycle....
Persistent link: https://www.econbiz.de/10005094361
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Real Estate Prices and the Importance of Bequest Taxation
Bellettini, Giorgio; Taddei, Filippo - CESifo - 2009
Taxation of bequests and donations is an important determinant of real estate prices. We show that, ceteris paribus, a decrease in taxes on inter vivos donations and bequests brings about an increase in real estate prices. We provide a general equilibrium rationalization in the context of OLG...
Persistent link: https://www.econbiz.de/10005051555
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Sharing Demographic Risk – Who is Afraid of the Baby Bust?
Ludwig, Alexander; Reiter, Michael - CESifo - 2008
We model the optimal reaction of a public PAYG pension system to demographic shocks. We compare the ex-ante first best and second best solution of a Ramsey planner with full commitment to the outcome under simple third best rules that mimic the pension systems observed in the real world. The...
Persistent link: https://www.econbiz.de/10005406258