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Bubble thy neighbor: portfolio effects and externalities from capital controls

Forbes, Kristin; Fratzscher, Marcel; Kostka, Thomas; … - European Central Bank - 2012

We use changes in Brazil’s tax on capital inflows from 2006 to 2011 to test for direct portfolio effects and …. We find that an increase in Brazil’s tax on foreign investment in bonds causes investors to significantly decrease their … portfolio allocations to Brazil in both bonds and equities. Investors simultaneously increase allocations to other countries …

Persistent link: https://www.econbiz.de/10010686793

The reform and implementation of the Stability and Growth Pact

Morris, Richard; Ongena, Hedwig; Schuknecht, Ludger - European Central Bank - 2006

Fiscal rules are instrumental for restraining deficit and spending biases in euro area Member States that could threaten the smooth functioning of Economic and Monetary Union (EMU). Ideally, fiscal rules should combine characteristics such as sufficient flexibility to allow for appropriate...

Persistent link: https://www.econbiz.de/10005344800

What are the effects of fiscal policy shocks? A VAR-based comparative analysis

Caldara, Dario; Kamps, Christophe - European Central Bank - 2008

The empirical literature using vector autoregressive models to assess the effects of fiscal policy shocks strongly disagrees on even the qualitative response of key macroeconomic variables to government spending and tax shocks. We provide new evidence for the U.S. over the period 1955-2006. We...

Persistent link: https://www.econbiz.de/10005344811

Fiscal policy in real time

Cimadomo, Jacopo - European Central Bank - 2008

This paper argues that any assessment on the intentional stance of fiscal policy should be based upon all the information available to policymakers at the time of fiscal planning. In particular, real-time data on the discretionary fiscal policy "instrument", the structural primary balance,...

Persistent link: https://www.econbiz.de/10005344836

Tax reform and labour-market performance in the euro area: a simulation-based analysis using the New Area-Wide Model

Coenen, Günter; McAdam, Peter; Straub, Roland - European Central Bank - 2007

In this paper, we employ a calibrated two-country version of the New Area-Wide Model (NAWM) currently under development at the European Central Bank to examine the potential benefits and spillovers of reducing labour-market distortions caused by euro area tax structures. Our analysis shows that...

Persistent link: https://www.econbiz.de/10005344892

Identifying endogenous fiscal policy rules for macroeconomic models

Pérez, Javier J.; Hiebert, Paul - European Central Bank - 2002

In this paper, we present a model-based method for identifying fiscal closure rules in stochastic macroeconomic models. The methodology is based on the stability analysis of the model at hand, with an endogenous derivation of a reaction on the part of the fiscal authority to state variables in...

Persistent link: https://www.econbiz.de/10005344898

Fiscal policy in a monetary economy with capital and finite lifetime

Annicchiarico, Barbara; Giammarioli, Nicola; … - European Central Bank - 2006

This paper develops a dynamic stochastic general equilibrium model with nominal rigidities, capital accumulation and finite lifetimes. The framework exhibits intergenerational wealth effects and is intended to investigate the macroeconomic implications of fiscal policy, which is specified by...

Persistent link: https://www.econbiz.de/10005344905

Fiscal convergence before entering the EMU

Onorante, Luca - European Central Bank - 2006

The monetary integration of the acceding countries will proceed in several distinct steps, starting with membership in the European Union (EU), followed by participation in the so-called Exchange Rate Mechanism (ERM) II and ultimately entry into the euro area. This paper addresses the question...

Persistent link: https://www.econbiz.de/10005344947

Temporary shocks and unavoidable transitions to a high-unemployment regime

Haan, Wouter J. Den - European Central Bank - 2003

This paper develops a model with multiple steady states (low tax and unemployment rate versus high tax and unemployment rate) in which equilibrium selection is not conditioned on a sunspot variable. Instead, large enough shocks initiate unavoidable transitions from one regime to the other. The...

Persistent link: https://www.econbiz.de/10005344960

What accounts for the changes in U.S. fiscal policy transmission?

Bilbiie, Florin O.; Meier, André; Müller, Gernot J. - European Central Bank - 2006

Using vector autoregressions on U.S. time series for 1957-1979 and 1983-2004, we find government spending shocks to have stronger effects on output, consumption, and wages in the earlier sample. We try to account for this observation within a DSGE model featuring price rigidities and limited...

Persistent link: https://www.econbiz.de/10005344962