Fuest, Clemens; Neumeier, Florian; Stöhlker, Daniel - 2019
and higher taxes in the future. This paper uses the institutional setting of German fiscal federalism to its advantage in … order to explore how fiscal policy reacts to exogenous tax revenue shocks. We use panel data from the German states covering … fiscal policy. Our results suggest that an exogenous decrease in tax revenues triggers a reduction in public spending of …