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Macroeconomic Stabilization, Monetary-Fiscal Interactions, and Europe's Monetary Union
Corsetti, Giancarlo - 2017
The euro area has been experiencing a prolonged period of weak economic activity and very low inflation. This paper reviews models of business cycle stabilization with an eye to formulating lessons for policy in the euro area. According to standard models, after a large recessionary shock...
Persistent link: https://www.econbiz.de/10012963947
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Effects of State-Dependent Forward Guidance, Large-Scale Asset Purchases and Fiscal Stimulus in a Low-Interest-Rate Environment
Coenen, Günter - 2020
We study the incidence and severity of lower-bound episodes and the efficacy of three types of state-dependent policies—forward guidance about the future path of interest rates, large-scale asset purchases and spending-based fiscal stimulus—in ameliorating the adverse consequences stemming...
Persistent link: https://www.econbiz.de/10012844862
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What Do We Really Know about Fiscal Sustainability in the EU? A Panel Data Diagnostic
Afonso, António - 2007
We assess the sustainability of public finances in the EU15 over the period 1970-2006 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...
Persistent link: https://www.econbiz.de/10012775987
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Expectations-Driven Liquidity Traps : Implications for Monetary and Fiscal Policy
Nakata, Taisuke - 2019
can give rise to persistent liquidity trap episodes. Unlike in the case of fundamental-driven liquidity traps, there is no …-driven liquidity traps. Raising the inflation target or appointing an inflation-conservative central banker improves inflation outcomes … sufficiently less concerned with government spending stabilization than society can eliminate expectations-driven liquidity traps …
Persistent link: https://www.econbiz.de/10012865525
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Fiscal Activism and the Zero Nominal Interest Rate Bound
Schmidt, Sebastian - 2014
-maker uses government spending more aggressively to stabilise inflation and the output gap in a liquidity trap than an authority …
Persistent link: https://www.econbiz.de/10013058237
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Market Power and Fiscal Policy in OECD Countries
Afonso, António - 2010
We compute average mark-ups as a measure of market power throughout time and study their interaction with fiscal policy and macroeconomic variables in a VAR framework. From impulse-response functions the results, with annual data for a set of 14 OECD countries covering the period 1970-2007, show...
Persistent link: https://www.econbiz.de/10013145150
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Dealing with a Liquidity Trap When Government Debt Matters : Optimal Time-Consistent Monetary and Fiscal Policy
Burgert, Matthias - 2014
a liquidity trap? To provide an answer, we employ a small stochastic New Keynesian model with a zero bound on nominal …-term nominal interest rate and debt-financed government spending. The optimal policy response to a liquidity trap critically … sector expectations that helps to dampen the fall in output and inflation at the outset of the liquidity trap …
Persistent link: https://www.econbiz.de/10013061806
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Passive Monetary Policy and Active Fiscal Policy in a Monetary Union
Maćkowiak, Bartosz; Schmidt, Sebastian - 2023
How is the price level determined in a monetary union when the common monetary policy pegs the nominal interest rate? How are the price levels in the member countries determined? We extend the fiscal theory of the price level to the case of a heterogenous monetary union. Price level determinacy...
Persistent link: https://www.econbiz.de/10014257510
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Expansionary fiscal consolidations in Europe: new evidence
Afonso, António - 2006
In order to assess the existence of expansionary fiscal consolidations in Europe, panel data models for private consumption are estimated for the EU15 countries, using annual data over the period 1970–2005. Three alternative approaches to determine fiscal episodes are used, and the level of...
Persistent link: https://www.econbiz.de/10011604721
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Economic growth and budgetary components: a panel assessment for the EU
Afonso, António; González Alegre, Juan - 2008
In this paper we test whether a reallocation of government budget items can enhance long-term GDP growth in a set of European countries. We apply modern panel data techniques to the period 1970-2006, and we use three alternative dependent variables in a growth regression: economic growth, total...
Persistent link: https://www.econbiz.de/10011604894