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Growth Forecast Errors and Fiscal Multipliers

Blanchard, Olivier J. - 2013

This paper investigates the relation between growth forecast errors and planned fiscal consolidation during the crisis. We find that, in advanced economies, stronger planned fiscal consolidation has been associated with lower growth than expected, with the relation being particularly strong,...

Persistent link: https://www.econbiz.de/10013085993

The Impact of Fiscal Policy on Economic Activity Over the Business Cycle - Evidence from a Threshold VAR Analysis

Baum, Anja - 2016

Does the state of the business cycle matter for the effects of fiscal policy shocks on GDP? This study analyses quarterly German data from 1976 to 2009 in a threshold SVAR, expanding the SVAR approach by Blanchard and Perotti (2002). In a linear benchmark SVAR, the analysis finds that hiking...

Persistent link: https://www.econbiz.de/10012991046

Fiscal multipliers in the COVID-19 recession

Auerbach, Alan J.; Gorodnichenko, Yuriy; McCrory, Peter B. - 2021

In response to the record-breaking COVID19 recession, many governments have adopted unprecedented fiscal stimuli. While countercyclical fiscal policy is effective in fighting conventional recessions, little is known about the effectiveness of fiscal policy in the current environment with...

Persistent link: https://www.econbiz.de/10012705410

The effects of fiscal policy in an estimated DSGE model : the case of the German stimulus packages during the great recession

Drygalla, Andrej; Holtemöller, Oliver; Kiesel, Konstantin - 2018

In this paper, we analyse the effects of the stimulus packages adopted by the German government during the Great Recession. We employ a standard mediumscale dynamic stochastic general equilibrium (DSGE) model extended by nonoptimising households and a detailed fiscal sector. In particular, the...

Persistent link: https://www.econbiz.de/10011804350

Learning about fiscal multipliers during the European sovereign debt crisis: Evidence from a quasi-natural experiment

Górnicka, Lucyna; Kamps, Christophe; Koester, Gerrit; … - 2018

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...

Persistent link: https://www.econbiz.de/10011916858

Opening the red budget box: Nonlinear effects of a tax shock in the UK

Colombo, Valentina - 2020

This paper studies the real effects of an exogenous UK tax change in recessions and expansions. The tax shock is … regressions (Granger and Teräsvirta, 1994), tax policy shock is found to affect UK macroeconomic variables depending on the phase … of the business cycle the economy is when tax shock occurs. An exogenous tax cut in recessions triggers a large …

Persistent link: https://www.econbiz.de/10012658408

Estimating Policy-Corrected Long-Term and Short-Term Tax Elasticities for the United States, Germany, and the United Kingdom

Hayo, Bernd; Mierzwa, Sascha; Unal, Umut - 2021

We estimate the elasticities of the most important tax categories using a new quarterly database of discretionary tax measures for the United States, Germany, and the United Kingdom over the period 1980Q1 to 2018Q2. Employing Romer and Romer's (2009) narrative approach, we construct a...

Persistent link: https://www.econbiz.de/10012543693

Sovereign Default and Imperfect Tax Enforcement

Pappadà, Francesco; Zylberberg, Yanos - 2019

We show that, in many countries, tax compliance is volatile and markedly responds to fiscal policy. To explore the consequence of this novel stylized fact, we build a model of sovereign debt with limited commitment and imperfect tax enforcement. Fiscal policy persistently affects the size of the...

Persistent link: https://www.econbiz.de/10012052800

Robustness Report on "Discretionary Tax Changes and the Macroeconomy: New Narrative Evidence from the United Kingdom", by James Cloyne (2013)

Kopecky, Joseph; Campbell, Douglas; Brodeur, Abel; … - 2024

Cloyne (2013) constructs a novel dataset documenting fiscal tax shocks in the United Kingdom using the narrative approach developed by Romer and Romer (2010), and estimates the impact of tax changes on GDP. He finds that a tax cut of one percent of GDP causes a 0.6 percent increase in output in...

Persistent link: https://www.econbiz.de/10014547815

Fiscal spillovers: The case of US corporate and personal income taxes

Hanson, Madeline; Hauser, Daniela; Priftis, Romanos - 2021

This paper extends the identification of unanticipated changes in average federal corporate and personal income tax rates in the United States, as proposed in Mertens and Ravn (2013), to the end of 2019, and assesses their propagation to economies with tight links to the US economy. While cuts...

Persistent link: https://www.econbiz.de/10012695571