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In a New Keynesian DSGE model with non-Ricardian consumers, we show that automatic stabilization according to a countercyclical spending rule following the idea of the debt brake is well suited both to steer the economy and in terms of welfare. In particular, the adjustment account set up to...
Persistent link: https://www.econbiz.de/10010990116
This paper uses an extended version of “FiMod—A DSGE Model for Fiscal Policy Simulations” (Stähler and Thomas Econ Model 29:239–261, <CitationRef CitationID="CR35">2012</CitationRef>) with endogenous job destruction decisions by private firms to analyze the effects of several currently discussed labor market reforms on the Spanish...</citationref>
Persistent link: https://www.econbiz.de/10010994595
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In a dynamic model of fiscal policy, social polarization provokes a deficit bias. Policy advisors have recently proposed that governments running a deficit should be forced to generate additional tax revenue. We show that this deficit taxation reduces each group's spending bias today because it...
Persistent link: https://www.econbiz.de/10005305346
The current crisis and discussions, in the euro area in particular, show that sovereign debt crises/defaults are no longer restricted to developing economies. After crises in many Latin American countries, the literature on quantitative dynamic macro-models of sovereign default has been...
Persistent link: https://www.econbiz.de/10009283656
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This paper uses an extended version of 'FiMod - A DSGE Model for Fiscal Policy Simulations' (Stähler and Thomas, 2011) with endogenous job destruction decisions by private firms to analyze the effects of several currently discussed labor market reforms on the Spanish economy. The main focus is...
Persistent link: https://www.econbiz.de/10009416982
In a real business cycle model with labor market frictions, we find that a more progressive tax schedule reduces structural unemployment as it fosters long-run incentives for job creation. Because there exists an optimal level of unemployment in a matching environment (“Hosios condition”),...
Persistent link: https://www.econbiz.de/10010639248
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Persistent link: https://www.econbiz.de/10005917792