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The impact of fiscal policy on economic growth is investigated within a panel of euro area member states over the …
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Identifying fiscal multipliers is usually constrained by the absence of a counterfactual scenario. Our new data set allows overcoming this problem by making use of the fact that recommendations under the EU's excessive deficit procedure (EDP) provide both a baseline no-policy-change scenario and...
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During the sovereign debt crisis, all euro countries have deployed "austerity packages", believing that they could regain the path of growth implementing structural reforms and cutting government spending. Such policies should have led to an initial decline in GDP followed by recovery and a...
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-called r-g. Whether the fiscal shock occurs when r-g is positive or negative matters for the size of the multiplier. Median … multiplier is inversely correlated with r-g. The calculations are based on the estimates of a factor-augmented interacted panel …
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We build a factor-augmented interacted panel vector-autoregressive model of the Euro Area (EA) and estimate it with … stance, captured by a shadow monetary policy rate. In the short run (one year), whether the fiscal shock occurs when the … economy is at the effective lower bound (ELB) or in normal times does not seem to matter for the size of the multiplier …
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