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Estimating simple fiscal policy reaction functions for the euro area countries

Plödt, Martin; Reicher, Claire - Institut für Weltwirtschaft (IfW) - 2014

We formulate and estimate a simple fiscal policy reaction function for the euro area and individual euro area countries. Our reaction function allows for primary surpluses to feature three components: an anti-cyclical response of primary surpluses to the output gap, a response to the debt-GDP...

Persistent link: https://www.econbiz.de/10010886926

A set of estimated fiscal rules for a cross-section of countries: Stabilization and consolidation through which instruments?

Reicher, Christopher - Institut für Weltwirtschaft (IfW) - 2013

This paper provides a set of detailed estimated fiscal reaction functions for a panel of twenty industrialized countries, and it discusses commonalities and differences with regard to systematic fiscal policies across countries. In general, the countries in the panel adjust tax revenues strongly...

Persistent link: https://www.econbiz.de/10010886930

The Macroeconomic Effects of Fiscal Consolidation in Dynamic General Equilibrium

Schwarzmüller, Tim; Wolters, Maik - Institut für Weltwirtschaft (IfW) - 2014

We provide a systematic analysis of fiscal consolidation in a medium-scale dynamic general equilibrium model. Our results show that the choice of the consolidation instrument is very important, not only with respect to the short- and long-run output effects of the different consolidation...

Persistent link: https://www.econbiz.de/10010933265

Fiscal Taylor Rules in the Postwar United States

Reicher, Christopher - Institut für Weltwirtschaft (IfW) - 2009

Recent research and events have brought fiscal policy back into the spotlight. Fiscal Taylor rules and error correction models have represented two different ways of quantifying the feedbacks from fiscal and economic conditions to fiscal policy decisions. This paper synthesizes these two ideas,...

Persistent link: https://www.econbiz.de/10005818814

An Estimated Fiscal Taylor Rule for the Postwar United States

Reicher, Christopher - Institut für Weltwirtschaft (IfW) - 2011

This paper documents the systematic response of postwar U.S. fiscal policy to fiscal imbalances and the business cycle using a multivariate Fiscal Taylor Rule. Adjustments to taxes and purchases both account for a large portion of the fiscal response to debt, while authorities seem reluctant to...

Persistent link: https://www.econbiz.de/10009149137

The role of lenders' trust in determining borrowing conditions for sovereign debt: An analysis of one-period government bonds with default risk

Guo, Yanling - Institut für Weltwirtschaft (IfW) - 2015

In this paper, the author considers the sovereign debt in the form of one-period government bonds with default risk, which can be purchased by and traded among domestic and foreign investors. She shows that the weight assigned to the lenders' interest by the borrowing government at the time of...

Persistent link: https://www.econbiz.de/10011269110

Corruption and Political Competition

Damania, Richard; Yalcýn, Erkan - Institut für Weltwirtschaft (IfW) - 2008

There is a growing evidence that political corruption is often closely associated with the rent seeking activities of … groups and the incidence of political corruption and determines whether electoral competition can eliminate political … corruption. We obtain some striking results. Greater electoral competition serves to lessen policy distortions. However, this in …

Persistent link: https://www.econbiz.de/10005083388

Primary surplus and debt projections based on estimated fiscal reaction functions for euro area countries

Plödt, Martin; Reicher, Claire - Institut für Weltwirtschaft (IfW) - 2014

We project the path of the public debt and primary surpluses for a number of countries in the euro area under a fiscal rule based on a set of estimated fiscal policy reaction functions. Our fiscal rule represents a fiscal analogue to a well-known monetary policy rule, and it is calibrated using...

Persistent link: https://www.econbiz.de/10010886925

A Simple Coase-Like Mechanism that Transfers Control of Government Spending Levels from Politicians to Voters

Graves, Philip E. - Institut für Weltwirtschaft (IfW) - 2007

Elected representatives have little incentive to pursue the interests of those electing them once they are elected. This well-known principle-agent problem leads, in a variety of theories of government, to nonoptimally large levels of government expenditure. An implication is that budgetary...

Persistent link: https://www.econbiz.de/10005083425

Die deutsche Vereinigung und das Leistungsbilanzdefizit: Eine ökonometrische Analyse der USA und Deutschlands

Schimmelpfennig, Axel - Institut für Weltwirtschaft (IfW) - 1997

The German current account balance has moved from surplus to deßcit in the course of unificalion. A theorelical model for the current account, encompassing the elaslicities, the monetary, and the absorptions approach, is set up and lested for Germany and the United States, using cointegration...

Persistent link: https://www.econbiz.de/10009276720