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The short- and long-run effects of fiscal consolidation in dynamic general equilibrium

Wolters, Maik; Schwarzmüller, Tim - Verein für Socialpolitik - VfS - 2014

investment, and transfer payments as well as permanent increases in the labor, capital and consumption tax rate. We find that … so that there is no increase in leisure. Cuts in government investment and capital tax increases have detrimental effects …

Persistent link: https://www.econbiz.de/10011163916

Dealing with a Liquidity Trap when Government Debt Matters: Optimal Time-Consistent Monetary and Fiscal Policy

Burgert, Matthias; Schmidt, Sebastian - Verein für Socialpolitik - VfS - 2014

How does the need to preserve government debt sustainability affect the optimal monetary and fiscal policy response to a liquidity trap? To provide an answer, we employ a small stochastic New Keynesian model with a zero bound on nominal interest rates and characterize optimal time-consistent...

Persistent link: https://www.econbiz.de/10011164117

Monetary and Fiscal Policy in a Monetary Union under the Zero Lower Bound constraint

Flotho, Stefanie - Verein für Socialpolitik - VfS - 2012

This paper explicitly models strategic interaction between two independent national fiscal authorities and a single central bank in a simple New Keynesian model of a monetary union. Monetary policy is constrained by the zero lower bound on nominal interest rates. Coordination of fiscal policies...

Persistent link: https://www.econbiz.de/10010955181

Exit Strategies

Winkler, Roland C.; Angeloni, Ignazio; Faia, Ester - Verein für Socialpolitik - VfS - 2011

We study alternative scenarios for exiting the post-crisis fiscal and monetary accommodation using the model of Angeloni and Faia (2010), that combines a standard DSGE framework with a fragile banking sector, suitably modified and calibrated for the euro area. Credibly announced and fast fiscal...

Persistent link: https://www.econbiz.de/10010957275

On the (In)effectiveness of Fiscal Devaluations in a Monetary Union

von Thadden, Leopold; Lipinska, Anna - Verein für Socialpolitik - VfS - 2013

and supranational monetary policy. We show that a unilateral tax shift towards indirect taxes in one of the countries … not always amplified by nominal wage rigidities. We document also how short-run effects of the tax shift depend on the … choice of the inflation index stabilised by the central bank and on whether the tax shift is anticipated. …

Persistent link: https://www.econbiz.de/10010957962

Government Forecasts of Budget Balances Under Asymmetric Loss: International Evidence

Rülke, Jan-Christoph; Pierdzioch, Christian - Verein für Socialpolitik - VfS - 2014

We study the loss function of 15 European governments as implied by their budget balance forecasts. Results suggest that the shape of the loss function varies across countries. The loss function becomes more asymmetric as the forecast horizon increases and in advance of parliamentary election....

Persistent link: https://www.econbiz.de/10011212425

Fiscal Devaluation in a Monetary Union

Engler, Philipp; Tervala, Juha; Ganelli, Giovanni; … - Verein für Socialpolitik - VfS - 2014

Value Added Tax. We find that a fiscal devaluation carried out in Southern European countries has a strong positive effect …

Persistent link: https://www.econbiz.de/10011163889

Revisiting the Narrative Approach of Estimating Fiscal Multipliers

Hebous, Shafik; Zimmermann, Tom - Verein für Socialpolitik - VfS - 2014

estimation of tax multipliers. We point out to a test for the checking the adequacy of regressing the narrative measure directly … variable approach. We consider estimating tax multipliers using six different recently published narrative tax series. The …

Persistent link: https://www.econbiz.de/10011163893

Overaccumulation, Public Debt, and the Importance of Land

Homburg, Stefan - Verein für Socialpolitik - VfS - 2014

In recent contributions, Weizs cker (2014) and Summers (2014) maintain that mature economies accumulate too much capital. They suggest large and lasting public deficits as a remedy. This paper argues that overaccumulation cannot occur in an economy with land. It presents novel data of aggregate...

Persistent link: https://www.econbiz.de/10011163917

Getting into GEAR: German and the Rest of Euro Area Fiscal Policy During the Crisis

Stähler, Nikolai; Gadatsch, Niklas; Hauzenberger, Klemens - Verein für Socialpolitik - VfS - 2014

In this paper, we use the estimated three-region DSGE model GEAR, which pictures Germany, the Euro Area and the Rest of the world and which is used by the Deutsche Bundesbank for policy analysis, to analyze how discretionary fiscal policy in Germany and the rest of EMU affected GDP growth and...

Persistent link: https://www.econbiz.de/10011163970