Showing 1 - 10 of 19
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
We ask whether cuts of government consumption lower or raise the sovereign default premium. To address this question, we set up a new data set for 38 emerging and advanced economies which contains quarterly time-series observations for sovereign default premia, government consumption, and...
Persistent link: https://www.econbiz.de/10012061613
In economies with fixed exchange rates, the adjustment to government spending shocks is asymmetric. A fiscal expansion appreciates the real exchange rate but does not stimulate output. A fiscal contraction does not alter the exchange rate, but lowers output. We develop these insights in a...
Persistent link: https://www.econbiz.de/10012544252
The zero lower bound era introduced a new perspective on the functionality of fiscal rules. With such low interest rates, the argument goes, extending debt financed public investment spending would be reasonable and thus existing fiscal rules too restrictive. Using data of Swiss cantonal public...
Persistent link: https://www.econbiz.de/10015070087
Government spending shocks are frequently identified in quarterly time-series data by ruling outa contemporaneous response of government spending to other macroeconomic aggregates. We provide evidence that this assumption may not be too restrictive for U.S. annual time-series data. -- Government...
Persistent link: https://www.econbiz.de/10003867216
This paper analyses the importance of fiscal mechanisms for regional risk sharing and redistribution in Switzerland. Switzerland is a particularly interesting setting in this context because it features both a high level of fiscal autonomy for Swiss cantons and explicit fiscal transfers between...
Persistent link: https://www.econbiz.de/10011795017
The distributional and disruptive effects of energy supply shocks are potentially large. We study the effectiveness of alternative fiscal responses in a two-country HANK model that we calibrate to the euro area. Energy subsidies can stabilize the domestic economy, but are fiscally costly and...
Persistent link: https://www.econbiz.de/10014391466
Persistent link: https://www.econbiz.de/10010196699
Formal fiscal rules have been introduced in many countries throughout the world. While most studies focus on intra-jurisdictional effects of fiscal rules, vertical impacts on the finances of other levels of governments have yet to be explored thoroughly. The paper investigates the influence of...
Persistent link: https://www.econbiz.de/10010424734
Persistent link: https://www.econbiz.de/10008935162