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The worst of both worlds : fiscal policy and fixed exchange rates
Born, Benjamin; D'Ascanio, Francesco; Müller, Gernot J.; … - 2019
Under fixed exchange rates, fiscal policy is an effective tool. According to classical views because it impacts the real exchange rate, according to Keynesian views because it impacts output. Both views have merit because the effects of government spending are asymmetric. A spending cut lowers...
Persistent link: https://www.econbiz.de/10012118599
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Fiscal delegation in a monetary union with decentralized public spending
Basso, Henrique S.; Costain, James - 2016
In a monetary union, the interaction between several governments and a single central bank is plagued by several sources of deficit bias, including common pool problems. Each government has strong preferences over local spending and taxation but suffers only part of the costs of union-wide...
Persistent link: https://www.econbiz.de/10011434438
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Nontradable goods and fiscal multipliers
Crespo Cuaresma, Jesús; Glocker, Christian - 2020
We assess the role that nontradable goods play as a determinant of fiscal spending multipliers, making use of a two-sector model. While fiscal multipliers increase with the share of nontradable goods, an inverted U-shaped relationship exists between multiplier size and the import share....
Persistent link: https://www.econbiz.de/10012270412
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Private debt overhang and the government spending multiplier : evidence for the United States
Bernardini, Marco; Peersman, Gert - 2015
Using state-dependent local projection methods and historical U.S. data, we find that government spending multipliers are considerably larger in periods of private debt overhang. In particular, we find significant crowding-out of personal consumption and investment in low-debt states, resulting...
Persistent link: https://www.econbiz.de/10010498604
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The euro area government spending multiplier in demand- and supply-driven recessions
Di Serio, Mario; Fragetta, Matteo; Gasteiger, Emanuel; … - 2022
We estimate government spending multipliers in demand- and supply-driven recessions for the Euro Area. Multipliers in a moderately demand-driven recession are 2-3 times larger than in a moderately supply-driven recession, with the difference between multipliers being non-zero with very high...
Persistent link: https://www.econbiz.de/10013174156
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PPP and the Balassa Samuelson effect : the role of the distribution sector
MacDonald, Ronald; Ricci, Luca Antonio - 2001
This paper investigates the impact of the distribution sector on the real exchange rate, controlling for the Balassa-Samuelson effect, as well as other macro variables. Long-run coefficients are estimated using a panel dynamic OLS estimator. The main result is that an increase in the...
Persistent link: https://www.econbiz.de/10011398102
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The equilibrium value of the Euro/$ US exchange rate : an evaluation of research
Stein, Jerome L. - 2001
The ultimate object of research concerning the Euro is to answer the following questions: (#1) What is the equilibrium trajectory of the nominal euro, measured as dollars/euro? (#2) To what extent has the equilibrium nominal euro been determined by relative prices (PPP), and to what extent has...
Persistent link: https://www.econbiz.de/10011399350
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Endogenous growth in an open economy and the real exchange rate
Federici, Daniela; Gandolfo, Giancarlo - 2001
undervaluation or overvaluation of the euro, and calculate its misalignment. The problem however arises of how to assess the … reliability of such misalignment calculations. In our opinion, we must have a benchmark (namely a period in which we exactly know … from outside sources the misalignment itself), against which we can test the validity of the model underlying our …
Persistent link: https://www.econbiz.de/10011399353
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Sovereign default and imperfect tax enforcement
Pappadà, Francesco; Zylberberg, Yanos - 2019
We show that, in many countries, tax compliance is volatile and markedly responds to fiscal policy. To explore the consequence of this novel stylized fact, we build a model of sovereign debt with limited commitment and imperfect tax enforcement. Fiscal policy persistently affects the size of the...
Persistent link: https://www.econbiz.de/10012029059
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The modality of fiscal consolidation and current account adjustment : presented at CESifo, Delphi Conference on Current Account Adjustments, May 2015
Adam, Antonis; Moutos, Thomas - 2015
In this paper we argue that supply-side adjustments (i.e. the reallocation of productive resources between the traded and non-traded sectors) can be an important determinant of the output costs of current account adjustment. The argument relies on the fact that tax evasion is more prevalent in...
Persistent link: https://www.econbiz.de/10011300383