This paper shows that debt-financed fiscal multipliers vary depending on the maturity of debt issued to finance spending. Utilizing state-dependent SVAR models and local projections for post-war US data, we show that a fiscal expansion financed with short term debt increases output more than one...

This paper evaluates the temporary VAT reduction invoked by the German government over the third and fourth quarter of 2020 as part of the COVID-19 stimulus package. There is considerable controversy. Critics argue that VAT reductions are ineffective in the presence of lockdown measures in place...

We study the impact of fiscal rules on macroeconomic performance following natural disaster shocks, using dynamic panel models and quarterly data for 89 countries. We find that countries with fiscal rules perform significantly better in the aftermath of such shocks than countries without rules....

In federal countries, such as the U.S., the fiscal authority consists not of one, but many governments, with state governments accounting for a sizable share of expenditures. We analyze how state partisanship of politicians affects state fiscal policy and quantify the possible macroeconomic...

We propose a novel framework where forward guidance (FG) is endogenously determined. Our model assumes that a monetary authority solves an optimal policy problem under commitment at the zero-lower bound. FG derives from two sources: 1. from commiting to keep interest rates low at the exit of the...

We investigate whether the macroeconomic effects of government spending shocks vary with the level of uncertainty. Using postwar US data and a Self-Exciting Interacted VAR (SEIVAR) model, we find that fiscal spending has positive output effects in tranquil times but is contractionary during...

We investigate whether US government spending multipliers are higher during periods of heightened uncertainty or economic slack as opposed to normal times. Using quarterly historical data and local projections, we estimate a cumulative one-year multiplier of 2 during uncertain periods. In...

In response to the spillovers of the COVID-19 pandemic on the economy, many governments paid cash transfers to households. We examine the effect of this fiscal policy instrument on households in two emerging economies, Vietnam and Thailand. Our analysis is based representative population surveys...

This paper reconsiders the theoretical foundations of EU regional policy in economics. It begins with a discussion of the line of thought of its prevalent explanation in equilibrium economics which is focusing on market failures as its key underpinning and which is the major toolkit of...