Download or read book Fiscal Policy in an Estimated Open economy Model for the Euro Area written by Marco Ratto and published by . This book was released on 2006 with total page 76 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recoge: Introduction - 1. The Model - 2. Estimation - 3. Assessing the Role of Fiscal Policy - 4. Conclusion.
Download or read book Fiscal Policy in an Estimated Open economy Model for the Euro Area written by and published by . This book was released on 2006 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper uses an estimated DSGE model for the euro area to study the effects of fiscal stabilisation policies. There are at least two features of the euro area economy which makes this analysis interesting. First, there are nominal rigidities in goods and labour markets, and there are financial market frictions with a significant share of liquidity constrained households. Second, the government is a major sector of the euro area economy. In this paper we look at fiscal stabilisation via government consumption, investment, transfers and wage taxes. Empirical evidence is found for systematic countercyclical fiscal policy. Consistent with previous findings, there is a small positive fiscal multiplier in the case of transitory fiscal shocks. It is found that fiscal policy is effective in stabilising GDP in the presence of demand and supply shocks. Fiscal policy helps to reduce the demand externality arising from nominal rigidities. In addition automatic stabilisation via government transfers helps to smooth consumption of liquidity constrained household. Fiscal policy partly compensates the financial market distortion. With distorted goods, labour and financial markets it is found that the estimated fiscal policy rules reduce fluctuations in euro area GDP by about 14 percent.
Download or read book Fiscal Policy in an Estimated Open economy Model for the Euro Area written by and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Fiscal Policy in an Estimated Open economy Model for the Euro Area written by and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book QUEST III written by Marco Ratto and published by . This book was released on 1981 with total page 57 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Euro Area Government Spending Multiplier at the Effective Lower Bound written by Adalgiso Amendola and published by International Monetary Fund. This book was released on 2019-06-28 with total page 57 pages. Available in PDF, EPUB and Kindle. Book excerpt: We build a factor-augmented interacted panel vector-autoregressive model of the Euro Area (EA) and estimate it with Bayesian methods to compute government spending multipliers. The multipliers are contingent on the overall monetary policy 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. However, as the time horizon increases, multipliers diverge across the two regimes. In the medium run (three years), the average multiplier is about 1 in normal times and between 1.6 and 2.8 at the ELB, depending on the specification. The difference between the two multipliers is distributed largely away from zero. More generally, the multiplier is inversely correlated with the level of the shadow monetary policy rate. In addition, we verify that EA data lend support to the view that the multiplier is larger in periods of economic slack, and we show that the shadow rate and the state of the business cycle are autonomously correlated with its size. The econometric approach deals with several technical problems highlighted in the empirical macroeconomic literature, including the issues of fiscal foresight and limited information.
Download or read book QUEST III an Estimated DSGE Model of the Euro Area with Fiscal and Monetary Policy written by and published by . This book was released on 2008 with total page 55 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper develops a DSGE model for an open economy and estimates it on euro area data using Bayesian estimation techniques. The model features nominal and real frictions, as well as financial frictions in the form of liquidity constrained households. The model incorporates active monetary and fiscal policy rules (for government consumption, investment, transfers and wage taxes) and can be used to analyse the effectiveness of stabilisation policies. To capture the unit root character of macroeconomic time-series we allow for stochastic trend in TFP, but instead of filtering data prior to estimation, we estimate the model in growth rates and stationary nominal ratios.
Download or read book How Loose How Tight A Measure of Monetary and Fiscal Stance for the Euro Area written by Nicoletta Batini and published by International Monetary Fund. This book was released on 2020-06-05 with total page 75 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper builds a model-based dynamic monetary and fiscal conditions index (DMFCI) and uses it to examine the evolution of the joint stance of monetary and fiscal policies in the euro area (EA) and in its three largest member countries over the period 2007-2018. The index is based on the relative impacts of monetary and fiscal policy on demand using actual and simulated data from rich estimated models featuring also financial intermediaries and long-term government debt. The analysis highlights a short-lived fiscal expansion in the aftermath of the Global Financial Crisis, followed by a quick tightening, with monetary policy left to be the “only game in town” after 2013. Individual countries’ DMFCIs show that national policy stances did not always mirror the evolution of the aggregate stance at the EA level, due to heterogeneity in the fiscal stance.
Download or read book Fiscal Policies in High Debt Euro Area Countries written by Antonella Cavallo and published by Springer. This book was released on 2017-11-15 with total page 185 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book explores the role of national fiscal policies in a selected group of Euro-area countries under the European Economic and Monetary Union (EMU). In particular, the authors characterize the response of output to fiscal consolidations and expansions in the small Euro-area open economies affected by high public and private debt. It is shown that the macroeconomic outcome of fiscal shocks is strongly related to debt levels. The Euro-area countries included in the investigation are Greece, Ireland, Italy, the Netherlands, Spain, and Portugal, over the sample period 1999–2016, i.e., the EMU period. The main econometric tools used in this research are structural vector autoregressive (VAR) models, including panel VAR models. The available literature relating to the subject is also fully reviewed. A further closely investigated topic is the potential spillover effects of German fiscal policies on the selected small Euro-area economies. Moreover, in the perspective of the evolution of the Euro Area towards a full Monetary and Fiscal Union, the authors study the effects of area-wide government spending shocks on aggregate output and other macroeconomic variables during the EMU period. The closing chapter of the book considers evidence on the consequences of austerity policies for European labour markets during recent years.
Download or read book The Effectiveness of Fiscal Policy in Stimulating Economic Activity written by Richard Hemming and published by International Monetary Fund. This book was released on 2002-12 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reviews the theoretical and empirical literature on the effectiveness of fiscal policy. The focus is on the size of fiscal multipliers, and on the possibility that multipliers can turn negative (i.e., that fiscal contractions can be expansionary). The paper concludes that fiscal multipliers are overwhelmingly positive but small. However, there is some evidence of negative fiscal multipliers.
Download or read book Economic Spillovers Structural Reforms and Policy Coordination in the Euro Area written by Bas van Aarle and published by Springer Science & Business Media. This book was released on 2007-10-31 with total page 241 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book analyzes economic interdependence in the Euro Area. It offers expert estimates of the sign and size of economic spillovers. Moreover, the authors explore the impact of economic policy coordination on economic performance in the Euro Area. Among the many topics explored are the link between fiscal and monetary policies in the Euro Area and the coordination of fiscal policies and of structural reforms.
Download or read book Sovereign Risk and Belief Driven Fluctuations in the Euro Area written by Giancarlo Corsetti and published by International Monetary Fund. This book was released on 2013-11-06 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: Sovereign risk premia in several euro area countries have risen markedly since 2008, driving up credit spreads in the private sector as well. We propose a New Keynesian model of a two-region monetary union that accounts for this “sovereign risk channel.” The model is calibrated to the euro area as of mid-2012. We show that a combination of sovereign risk in one region and strongly procyclical fiscal policy at the aggregate level exacerbates the risk of belief-driven deflationary downturns. The model provides an argument in favor of coordinated, asymmetric fiscal stances as a way to prevent selffulfilling debt crises.
Download or read book QUEST III an Estimated DSGE Model of the Euro Area with Fiscal and Monetary Policy written by Marco Ratto and published by . This book was released on 2008 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper develops a DSGE model for an open economy and estimates it on euro area data using Bayesian estimation techniques. The model features nominal and real frictions, as well as financial frictions in the form of liquidity constrained households. The model incorporates active monetary and fiscal policy rules (for government consumption, investment, transfers and wage taxes) and can be used to analyse the effectiveness of stabilisation policies. To capture the unit root character of macroeconomic time-series we allow for stochastic trend in TFP, but instead of filtering data prior to estimation, we estimate the model in growth rates and stationary nominal ratios.
Download or read book Fiscal Policy in the European Union written by J. Ferreiro and published by Springer. This book was released on 2008-11-27 with total page 235 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides a comprehensive analysis of national fiscal policies in the European Union and in the European Monetary Union. Adopting a critical perspective, the book offers a deep insight into the consequences of the current strategy of national fiscal policies on economic activity.
Download or read book Estimates of the Open Economy New Keynesian Phillips Curve for Euro Area Countries written by Fabio Rumler and published by . This book was released on 2005 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book International Dimensions of Monetary Policy written by Jordi Galí and published by University of Chicago Press. This book was released on 2010-03-15 with total page 663 pages. Available in PDF, EPUB and Kindle. Book excerpt: United States monetary policy has traditionally been modeled under the assumption that the domestic economy is immune to international factors and exogenous shocks. Such an assumption is increasingly unrealistic in the age of integrated capital markets, tightened links between national economies, and reduced trading costs. International Dimensions of Monetary Policy brings together fresh research to address the repercussions of the continuing evolution toward globalization for the conduct of monetary policy. In this comprehensive book, the authors examine the real and potential effects of increased openness and exposure to international economic dynamics from a variety of perspectives. Their findings reveal that central banks continue to influence decisively domestic economic outcomes—even inflation—suggesting that international factors may have a limited role in national performance. International Dimensions of Monetary Policy will lead the way in analyzing monetary policy measures in complex economies.
Download or read book Fiscal Policy and the Cycle in the Euro Area written by Alessandro Turrini and published by . This book was released on 2008 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt:
