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Fiscal sustainability and policy implications for the euro area

Balassone, Fabrizio; Cunha, Jorge Correia da; Langenus, … - Deutsche Bundesbank - 2009

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/10005083154

Does Wagner's law ruin the sustainability of German public finances?

Priesmeier, Christoph; Koester, Gerrit B. - Deutsche Bundesbank - 2012

debt brake for re-establishing sustainable public finances even under Wagner's law. …

Persistent link: https://www.econbiz.de/10010957133

A disaggregated framework for the analysis of structural developments in public finances

Kremer, Jana; Braz, Cláudia Rodrigues; Brosens, Teunis; … - Deutsche Bundesbank - 2006

In this paper, we present a disaggregated framework for the analysis of past and projected structural developments in the most relevant revenue and expenditure categories and the fiscal balance. The framework, in particular, distinguishes between the effects of discretionary fiscal policy and of...

Persistent link: https://www.econbiz.de/10005083268

Learning about fiscal policy and the effects of policy uncertainty

Hollmayr, Josef; Matthes, Christian - Deutsche Bundesbank - 2013

The recent crisis in the United States has often been associated with substantial amounts of policy uncertainty. In this paper we ask how uncertainty about fiscal policy affects the impact of fiscal policy changes on the economy when the government tries to counteract a deep recession. The...

Persistent link: https://www.econbiz.de/10010957088

Optimal sovereign default

Adam, Klaus; Grill, Michael - Deutsche Bundesbank - 2013

itself by issuing non-contingent debt. We show that Ramsey optimal policies occasionally deviate from the legal repayment … obligation and repay debt only partially, even if such deviations give rise to significant 'default costs'. Optimal default …

Persistent link: https://www.econbiz.de/10010957095

Fiscal deficits, financial fragility, and the effectiveness of government policies

Kirchner, Markus; van Wijnbergen, Sweder - Deutsche Bundesbank - 2012

Recent macro developments in the euro area have highlighted the interactions between fiscal policy, sovereign debt, and … with recent research, but introduce asset choice and sovereign debt holdings in the portfolio of banks. Using this model … sovereign debt under a leverage constraint. Our results show that, when banks invest a substantial fraction of their assets in …

Persistent link: https://www.econbiz.de/10010957129

What do deficits tell us about debt? Empirical evidence on creative accounting with fiscal rules in the EU

von Hagen, Jürgen; Wolff, Guntram B. - Deutsche Bundesbank - 2004

Fiscal rules, such as the excessive deficit procedure and the stability and growth pact (SGP), aim at constraining government behavior. Milesi-Ferretti (2003) develops a model in which governments circumvent such rules by reverting to creative accounting. The amount of this creative accounting...

Persistent link: https://www.econbiz.de/10005083124

Fool the markets? Creative accounting, fiscal transparency and sovereign risk premia

Bernoth, Kerstin; Wolff, Guntram B. - Deutsche Bundesbank - 2006

We investigate the effects of official fiscal data and creative accounting signals on interest rate spreads between bond yields in the European Union. Our model predicts that risk premia contained in government bond spreads should increase in both, the official fiscal position and the expected...

Persistent link: https://www.econbiz.de/10005083134

Taxing deficits to restrain government spending and foster capital accumulation

Stähler, Nikolai - Deutsche Bundesbank - 2007

In a dynamic model of fiscal policy, social polarization provokes a deficit bias. Policy advisors have recently proposed that governments running a deficit should be forced to generate additional tax revenue. We show that this deficit taxation reduces the deficit bias as it internalizes the...

Persistent link: https://www.econbiz.de/10005083191

Moral hazard and bail-out in fiscal federations: evidence for the German Länder

Heppke-Falk, Kirsten H.; Wolff, Guntram B. - Deutsche Bundesbank - 2007

market react significantly to the relative debt level of a state (Land), we also find that a larger interest payments …

Persistent link: https://www.econbiz.de/10005083197