Cyclically induced changes in taxes and government expenditures which tend to stabilise aggregate output are called automatic stabilisers. Using a small macro model, this paper reviews alternative methods of measuring the smoothing power of automatic stabilisers and discusses their relationship...

We investigate the short-term effects of fiscal policy shocks on the German economy following the SVAR approach by Blanchard and Perotti (2002). We find that direct government expenditure shocks increase output and private consumption on impact with low statistical significance, while they...

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...

The report focuses on the relative macroeconomic performance since the global financial crisis of six Northern European countries with a special emphasis on Finland. While fiscal and monetary policies have definitely impacted on macroeconomic outcomes in the six countries examined, as a whole...

In recent years, a lot of rules concerning government expenditures as well as tax revenues were changed in Germany. Government expenditures in relation to GDP were reduced, income tax rates were lowered and the budget deficit declined. The structure of government expenditures changed in favor of...

In many countries, fiscal policy became strongly expansionary in order to fight the recession. Structural budget deficits increased sharply and might remain high after the end of the recession. This would raise real interest rates and would impair economic growth. Some measures to reduce the...

Die zentrale finanzpolitische Aufgabe der kommenden Jahre wird die Konsolidierung der öffentlichen Haushalte sein. Auch nach Bewältigung der Rezession werden weiterhin "strukturelle" Defizite in einer Größenordnung von drei bis vier Prozent des Bruttoinlandsprodukts bestehen bleiben....