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Fiscal Policies and Business Cycles in an Enlarged Euro Area
Staehr, Karsten - 2008
This paper compares the cyclical properties of fiscal policies across the 12 original eurozone countries and the future … counter-cyclical in Central and Eastern European countries than in members of the eurozone. The main differences arise from … the revenue side. Differences in the formation of fiscal policy between current and future eurozone countries decrease …
Persistent link: https://www.econbiz.de/10012773620
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Optimal Fiscal Policy with Labor Selection
Chugh, Sanjay K. - 2018
This paper characterizes long-run and short-run optimal fiscal policy in the labor selection framework. In a calibrated non-Ramsey decentralized equilibrium, labor market volatility is inefficient. Keeping fixed the structural parameters, the Ramsey government achieves efficient labor market...
Persistent link: https://www.econbiz.de/10012912678
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Fiscal Rules, Financial Stability and Optimal Currency Areas
De Grauwe, Paul - 2015
In this paper we suggest that Eurozone countries face a policy trade-off among: 1) a common rule imposing co … conclude that the intense fiscal rules that have been introduced in the Eurozone after the emergence of the debt crisis reduced …
Persistent link: https://www.econbiz.de/10013020581
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Fiscal Federlism in a Monetary Union : The Cooperation Pitfall
Kempf, Hubert - 2018
Fiscal federalism may not be a panacea in a monetary union if it does not address the non-cooperative behaviour between fiscal policymakers. To prove this, we assess the relative merits of a fiscal federalism scheme in a monetary union and intergovernmental fiscal cooperation without such a...
Persistent link: https://www.econbiz.de/10012930695
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Smells Like Fiscal Policy? Assessing the Potential Effectiveness of the ECB's OMT Program
Hristov, Nikolay - 2014
This paper explores the potential effectiveness of the ECB's Outright Monetary Transaction (OMT) program in safeguarding an appropriate monetary policy transmission. Since the program aims at manipulating bank lending rates by conducting sovereign bond purchases on secondary markets, a stable...
Persistent link: https://www.econbiz.de/10013057668
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What Do We Really Know About Fiscal Sustainability in the EU? A Panel Data Diagnostic
Afonso, António; Rault, Christophe - 2021
We assess the sustainability of public finances in the EU15 using stationarity and cointegration analysis. Specifically, we use panel unit root tests of the first and second generation allowing in some cases for structural breaks. We also apply modern panel cointegration techniques developed by...
Persistent link: https://www.econbiz.de/10013316576
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Rent-Seeking Competition from State Coffers : A Calibrated DSGE Model of the Euro Area
Angelopoulos, Konstantinos - 2006
This paper incorporates an uncoordinated struggle for extra fiscal favors into an otherwise standard Dynamic Stochastic General Equilibrium model. This reflects the popular belief that interest groups compete for privileged transfers and tax treatment at the expense of the general public...
Persistent link: https://www.econbiz.de/10012781542
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The Macroeconomic Policy Challenges of Balance Sheet Recession : Lessons from Japan for the European Crisis
Schnabl, Gunther - 2013
The paper compares the boom-and-bust cycles in Japan and Europe with respect to the reasons for excessive booms, the characteristics of the crises, and the (potential) effects of the crisis therapies. As in Japan the consequence of expansionary monetary and fiscal policies is the hysteresis of...
Persistent link: https://www.econbiz.de/10013081055
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The Role of Fiscal Policy in a Monetary Union : Are National Automatic Stabilizers Effective?
Colciago, Andrea; Muscatelli, Anton; Ropele, Tiziano; … - 2021
We assess the role of national fiscal policies, as automatic stabilizers, within a monetary union. We use a two-country New Keynesian DGE model which incorporates non-Ricardian consumers (as in Gali et al. 2004) and a home bias in the composition of national consumption bundles. We find that...
Persistent link: https://www.econbiz.de/10013317638
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Fiscal Transfers in a Monetary Union with Exit Option
Hefeker, Carsten - 2015
It is widely debated whether a monetary union has to be accompanied by a fiscal transfer scheme to accommodate asymmetric shocks. We build a model of a monetary union with a central bank and two heterogeneous countries that are linked by a fiscal transfer scheme with repercussions on monetary...
Persistent link: https://www.econbiz.de/10013025966