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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

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

Expected budget deficits and interest rate swap spreads - Evidence for France, Germany and Italy

Heppke-Falk, Kirsten H.; Hüfner, Felix P. - Deutsche Bundesbank - 2004

This study analyses whether expected budget deficits have an impact on interest rate swap spreads in France, Germany … the whole sample period (1994-2004). However, we find an increase in market discipline for Germany and France since the … signing of the Stability and Growth Pact, and for Germany also since the start of European monetary union. …

Persistent link: https://www.econbiz.de/10005083224

Fiscal institutions, fiscal policy and sovereign risk premia

Hallerberg, Mark; Wolff, Guntram B. - Deutsche Bundesbank - 2006

We investigate the effect of fiscal institutions such as the strength of the finance minister in the budget process and deficits on interest spreads contained in bond yields of the countries now belonging to the Eurozone. Deficits significantly increase risk premia measured by relative swap...

Persistent link: https://www.econbiz.de/10005083235

Budgetary Policy and Unemployment Dynamics

von Thadden, Leopold; Kaas, Leo - Deutsche Bundesbank - 2001

We consider a dynamic general equilibrium model with collective wage bargaining and investigate how unemployment dynamics are affected by two types of budgetary policies. In line with traditional reasoning, a balanced-budget rule amplifies fluctuations in the short run, whereas an...

Persistent link: https://www.econbiz.de/10005083290

How effective are automatic stabilisers? Theory and empirical results for Germany and other OECD countries

Tödter, Karl-Heinz; Scharnagl, Michael - Deutsche Bundesbank - 2004

the smoothing power of automatic stabilisers for Germany and some other OECD countries. The results for Germany suggest …

Persistent link: https://www.econbiz.de/10005083297

Reforming the labor market and improving competitiveness: An analysis for Spain using FiMod

Schwarzmüller, Tim; Stähler, Nikolai - Deutsche Bundesbank - 2011

This paper uses an extended version of 'FiMod - A DSGE Model for Fiscal Policy Simulations' (Stähler and Thomas, 2011) with endogenous job destruction decisions by private firms to analyze the effects of several currently discussed labor market reforms on the Spanish economy. The main focus is...

Persistent link: https://www.econbiz.de/10009416982

FiMod - a DSGE model for fiscal policy simulations

Stähler, Nikolai; Thomas, Carlos - Deutsche Bundesbank - 2011

This paper develops a medium-scale dynamic, stochastic, general equilibrium (DSGE) model for fiscal policy simulations. Relative to existingmodels of this type, our model incorporates a two-country monetary union structure, which makes it well suited to simulate fiscal measures by relatively...

Persistent link: https://www.econbiz.de/10009493747

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

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

We identify investor moral hazard in the German fiscal federation. Our identification strategy is based on a variable, which was used by the German Federal Constitutional Court as an indicator to determine eligibility of two German states (Länder) to a bail-out, the interest payments-to-revenue...

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

Active monetary policy, passive fiscal policy and the value of public debt: some further monetarist arithmetic

von Thadden, Leopold - Deutsche Bundesbank - 2003

We consider the properties of two monetary policy rules ("strict inflation targeting", "constant money growth rule") in an intertemporal equilibrium model with flexible prices in which monetary policy is "active", while fiscal policy is "passive". Specifically, we assume that the fiscal agent...

Persistent link: https://www.econbiz.de/10005083165

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