Fiscal Policy and the Cycle in the Euro Area
Author: Alessandro Turrini
Publisher:
Published: 2008
Total Pages: 48
ISBN-13:
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Fiscal Policy in an Estimated Open-economy Model for the Euro Area
Author: Marco Ratto
Publisher:
Published: 2006
Total Pages: 76
ISBN-13:
DOWNLOAD EBOOKRecoge: Introduction - 1. The Model - 2. Estimation - 3. Assessing the Role of Fiscal Policy - 4. Conclusion.
The Euro-Area Government Spending Multiplier at the Effective Lower Bound
Author: Adalgiso Amendola
Publisher: International Monetary Fund
Published: 2019-06-28
Total Pages: 57
ISBN-13: 1498322913
DOWNLOAD EBOOKWe 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.
Money, Trade and Finance
Author: Ioanna T. Kokores
Publisher: Palgrave Macmillan
Published: 2022-11-09
Total Pages: 0
ISBN-13: 9783030732219
DOWNLOAD EBOOKThis book analyses several aspects on the efficient resource allocation in the aftermath of the global financial crisis and the European sovereign debt crisis. The main focus of the volume is on recent European Union (EU) experience highlighting the interrelation between inherent structural rigidities and practical limitations in the conduct of sound economic policy. Special reference is made to Greece (evidencing unprecedented experience), the EU periphery countries and the US. This book will be of interest to academic and central bank researchers, business practitioners (in consultancy and finance) and graduate students, as it is a good example of how scholarly dialogue can contribute to contemporary high-quality policy debate on sound liquidity provision and financial stability in the Eurozone, as well as the effective ways to combat recession in the EU periphery countries.
Fiscal Politics in the Euro Area
Author: Luc Eyraud
Publisher: International Monetary Fund
Published: 2017-01-30
Total Pages: 44
ISBN-13: 1475572913
DOWNLOAD EBOOKThis paper provides evidence of fiscal procyclicality, excessive deficits, distorted budget composition and poor compliance with fiscal rules in the euro area. Our analysis relies on real-time data for 19 countries participating in the euro area over 1999–2015. We look for, but do not find, conclusive evidence of bias in procedures in relation to country size. The paper also briefly reviews the literature on political economy factors and policy biases, and offers some reflections on the euro area architecture.
Fiscal Policy Stabilisation and the Financial Cycle in the Euro Area
Author: Cinzia Alcidi
Publisher:
Published: 2017
Total Pages: 34
ISBN-13: 9789279648953
DOWNLOAD EBOOKThis paper examines the impact of the financial cycle on the capacity of the economy to deal with shocks, with a particular focus on fiscal policy in the euro area member states. It starts by measuring national financial cycles and investigating the synchronisation across them as well as their relationship to the medium-term business cycle. It finds that financial cycles tend to be synchronised but their amplitudes differ significantly across countries. Business cycles tend to be positively correlated with the financial cycle, but they usually are smaller. The paper then examines if and how the financial cycle affects international risk-sharing among euro area member states and finds that economic booms and busts are often associated with phases of financial integration and disintegration at the level of the euro area. Such developments are reflected in the degree of international risk-sharing, which turns out to behave procyclically. Lastly, the capacity of domestic fiscal policy to smooth asymmetric shocks in the euro area declines dramatically during recessionary phases of the domestic financial cycle. The paper concludes that macroprudential policies are an important tool for preventing excessive swings in the financial cycle, but they should be complemented by a central stabilisation mechanism, which can make both capital markets and fiscal policy more resilient to disruption associated with the financial cycle.
A Central Fiscal Stabilization Capacity for the Euro Area
Author: Mr.Nathaniel G Arnold
Publisher: International Monetary Fund
Published: 2018-03-26
Total Pages: 57
ISBN-13: 1484348206
DOWNLOAD EBOOKThis note outlines a concrete proposal for a euro area CFC that could help smooth both country-specific and common shocks. Specifically, it proposes a macroeconomic stabilization fund financed by annual contributions from countries used to build up assets in good times and make transfers to countries in bad times, as well as a borrowing capacity in case large or persistent shocks exhaust the fund’s assets. The note also discusses several features aimed at avoiding permanent transfers between countries and making the CFC function as automatically as possible—to limit the scope for disputes over its operation—both of which are important points to make it politically acceptable.
Monetary and Fiscal Policies in the Euro Area
Author: Michael Carlberg
Publisher: Springer Science & Business Media
Published: 2006-03-14
Total Pages: 298
ISBN-13: 3540298002
DOWNLOAD EBOOKThis book studies the interactions between monetary and fiscal poUcies in the euro area. It carefully discusses the process of policy competition and the structure of policy cooperation. As to policy competition, the focus is on competition between the European central bank, the American central bank, the German government, and the French government. As to policy cooperation, the focus is on the same institutions. These are higher-dimensional issues. The pohcy targets are price stability and full employment. The policy makers follow co- turkey or gradualist strategies. The policy decisions are taken sequentially or simultaneously. Monetary and fiscal policies have spillover effects. Special features of this book are numerical simulations of policy competition and numerical solutions to policy cooperation. The present book is part of a larger research project on European Monetary Union, see the references at the back of the book. Some parts of this project were presented at the World Congress of the International Economic Association. Other parts were presented at the International Conference on Macroeconomic Analysis, at the International Institute of Public Finance, at the Macro Study Group of the German Economic Association, at the Annual Meeting of the Austrian Economic Association, at the Gottingen Workshop on International Economics, at the Halle Workshop on Monetary Economics, at the Research Seminar on Macroeconomics in Freiburg, and at the Passau Workshop on International Economics.
Fiscal Policy and Interest Rates in the European Union
Author: Klaas Knot
Publisher: Edward Elgar Publishing
Published: 1996-01-01
Total Pages: 232
ISBN-13: 9781781959657
DOWNLOAD EBOOKThis is an extensive study concerned with the potential effects of fiscal policy on financial markets in the EU. It takes into account the gradual liberalization of capital movements through Western Europe & the framework of the European Monetary System.
The Impact of r-g on the Euro-Area Government Spending Multiplier
Author: Mario di Serio
Publisher: International Monetary Fund
Published: 2021-02-12
Total Pages: 30
ISBN-13: 1513569511
DOWNLOAD EBOOKWe compute government spending multipliers for the Euro Area (EA) contingent on the interestgrowth differential, the so-called r-g. Whether the fiscal shock occurs when r-g is positive or negative matters for the size of the multiplier. Median estimates vary conditional on the specification, but the difference between multipliers in the negative and positive r-g regimes differs systematically from zero with very high probability. Over the medium run (5 years), median cumulated multipliers range between 1.22 and 1.77 when r-g is negative, and between 0.51 and 1.26 when r-g is positive. We show that the results are not driven by the state of the business cycle, the monetary policy stance, or the level of government debt, and that the multiplier is inversely correlated with r-g. The calculations are based on the estimates of a factor-augmented interacted panel vector-autoregressive model. The econometric approach deals with several technical problems highlighted in the empirical macroeconomic literature, including the issues of fiscal foresight and limited information.
