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Determinants of the Degree of Fiscal Sustainability

Afonso, António; Alves, José; Coelho, José Carlos - 2023

We assess the link between fiscal sustainability coefficients, namely the responses of the primary government balance and the global government balance to the debt-to-GDP ratio, and the response of government revenues to government expenditures. For 22 OECD developed countries we use annual data...

Persistent link: https://www.econbiz.de/10014262952

Fiscal Consequences of Corporate Tax Avoidance

Bilicka, Katarzyna Anna; Dubinina, Evgeniya; Janský, Petr - 2023

We study the consequences of multinational tax avoidance on the structure of government tax revenues. To motivate our analysis, we show that countries with high revenue losses due to profit shifting have lower corporate tax revenues and rates and higher indirect tax revenues and rates. To...

Persistent link: https://www.econbiz.de/10014356605

Monetary Policy Interactions : The Policy Rate, Asset Purchases, and Optimal Policy with an Interest Rate Peg

Gödl-Hanisch, Isabel; Mau, Ronald; Rawls, Jonathan - 2023

We study monetary policy in a New Keynesian model with a variable credit spread and scope for central bank asset purchases to matter. A novel financial and labor market interaction generates an endogenous cost-push channel in the Phillips curve and a credit wedge in the IS curve. The “divine...

Persistent link: https://www.econbiz.de/10014357043

Consumption Patterns of Indebted Households : Unravelling the Relevance of Fiscal Policy

Afonso, António; Rodrigues, Eduardo de Sá Fortes Leitão - 2023

We have investigated the influence of fiscal instruments, notably taxes on income and government spending, on household consumption in two different samples and two measures of household debt to provide a comprehensive analysis of the topic. We used dynamic panel models and the GMM approach for...

Persistent link: https://www.econbiz.de/10014346252

The Effects of Monetary Policy Surprises and Fiscal Sustainability Regimes in the Euro Area

Afonso, António; Alves, José; Ionta, Serena - 2023

We study the effect of monetary surprise shocks on real output and the price level, conditioned on different fiscal sustainability regimes in the period 2001Q4-2021Q4. First, we estimate time-varying fiscal sustainability coefficients based on Bohn’s (1998) approach through Schlicht’s (2003)...

Persistent link: https://www.econbiz.de/10014346445

Does Government Spending Efficiency Improve Fiscal Sustainability?

Afonso, António; Alves, José - 2022

We evaluate the impact of government spending efficiency on fiscal sustainability for a panel of 35 OECD countries during the period of 2007-2020. To answer our research question we first compute the magnitude of the responses of government revenues to changes in government spending. Next, we...

Persistent link: https://www.econbiz.de/10013289691

The Euro Area Government Spending Multiplier in Demand- and Supply-Driven Recessions

Di Serio, Mario; Fragetta, Matteo; Gasteiger, Emanuel; … - 2022

We estimate government spending multipliers in demand- and supply-driven recessions for the Euro Area. Multipliers in a moderately demand-driven recession are 2-3 times larger than in a moderately supply-driven recession, with the difference between multipliers being non-zero with very high...

Persistent link: https://www.econbiz.de/10013292507

Fiscal Sustainability, Fiscal Reactions, Pitfalls and Determinants

Afonso, António; Coelho, José Carlos - 2022

We examine the sustainability of public finances and its determinants for 19 Eurozone countries from 1995 to 2020. We conclude for the existence of panel cointegration between government revenues and expenditures; primary government balance and one-period lagged public debt-to-GDP ratio; and...

Persistent link: https://www.econbiz.de/10013296248

Fiscal Consolidation Plans with Underground Economy

Ferrara, Maria; Marzano, Elisabetta; Varlese, Monica - 2022

Fiscal consolidation literature often neglects that there are economies with a sizable underground sector and that most of time it is accounted in GDP statistics. This produces non negligible effects on fiscal multipliers. This paper explores a fiscal consolidation plan calling for a downsizing...

Persistent link: https://www.econbiz.de/10013296709

To Consolidate or Not to Consolidate? A Multi-Step Analysis to Assess Needed Fiscal Sustainability

Afonso, António; Alves, José; Jalles, João Tovar - 2022

We assess the specific need (or its absence) of a country to implement a fiscal consolidation programme by focusing specifically on their degree of success, notably in terms of fiscal sustainability. The “need” to consolidate is based on having a primary balance above or below the...

Persistent link: https://www.econbiz.de/10013296715