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Optimal government spending and unemployment

Linnemann, Ludger; Schabert, Andreas - 2008 - This version: February 29, 2008

We study optimal government spending in a business cycle model with frictional unemployment. The Ramsey optimal policy is contrasted with a reference policy which would be first best in a frictionless economy. Results are: the Ramsey policy i) implies a higher steady state ratio of government...

Persistent link: https://www.econbiz.de/10011374417

Transmission of government spending shocks in the Euro area : time variation and driving forces

Kirchner, Markus; Cimadomo, Jacopo; Hauptmeier, Sebastian - 2010

This paper provides new evidence on the effects of government spending shocks and the fiscal transmission mechanism in the euro area for the period 1980-2008. Our contribution is two-fold. First, we investigate changes in the macroeconomic impact of government spending shocks using time-varying...

Persistent link: https://www.econbiz.de/10011380027

Government spending shocks, sovereign risk and the exchange rate regime

Bonam, Dennis; Lukkezen, Jasper - 2013

Conventional wisdom teaches that the output response upon a fiscal expansion is higher under fixed than floating exchange rates for a small open economy. We analyse the effects of fiscal expansions using a New Keynesian model and find that this result reverses in times of sovereign default risk....

Persistent link: https://www.econbiz.de/10010227296

Productive government expenditure in monetary business cycle models

Linnemann, Ludger; Schabert, Andreas - 2005

This paper assesses the transmission of fiscal policy shocks in a New Keynesian framework where government expenditures contribute to aggregate production. It is shown that even if the impact of government expenditures on production is small, this assumption helps to reconcile the models'...

Persistent link: https://www.econbiz.de/10011343264

Private and public risk sharing in the Euro area

Cimadomo, Jacopo; Furtuna, Oana; Giuliodori, Massimo M. - 2017 - This version: 11 July 2017

This paper investigates the contribution of private and public channels for consumption risk sharing in the EMU over … estimating how risk sharing has evolved since the start of the EMU, and in particular during the recent crisis. Our results … suggest that, whereas in the early years of the EMU only about 40% of output shocks were smoothed, in the aftermath of the …

Persistent link: https://www.econbiz.de/10011688776

Enhanced cooperation in an asymmetric model of tax competition

Vrijburg, Hendrik; Mooij, Ruud A. de - 2009

This paper analyzes enhanced cooperation agreements in corporate taxation in a three country tax competition model where countries differ in size. We characterize equilibrium tax rates and the optimal tax responses due to the formation of an enhanced cooperation agreement. Conditions for...

Persistent link: https://www.econbiz.de/10011379630

The causal links between aid and government expenditures

Marć, Łukasz - 2014

The most recent literature on aid effectiveness finds a positive effect of aid on growth. To the extent that aid goes through the budget, this either reflects an aid-financed increase in government expenditures (quantity effect) or an improvement in the use of government resources as a result of...

Persistent link: https://www.econbiz.de/10010231655

New evidence on fungibility at the aggregate level

Marć, Łukasz - 2012

Persistent link: https://www.econbiz.de/10009723004

The trade and FDI effects of EMU enlargement

Brouwer, Jelle; Paap, Richard; Viaene, Jean-Marie - 2007

European Monetary Union (EMU) to the 10 countries that obtained EU membership in 2004. One-way and two-way error component …. Using a simulation-based technique, we find that estimates of FDI effects of EMU range between 18.5% for Poland and 30% for …

Persistent link: https://www.econbiz.de/10011372974

The importance of accounting for time trends when estimating the Euro effect on trade

Bun, Maurice J. G.; Klaassen, Franc - 2004

To study the effect of the euro on international goods trade one typically estimates a panel model for the level of trade. Trade levels increase over time, and we show that this is not fully explained by the included regressors. Because the euro is only present at the end of the sample, this may...

Persistent link: https://www.econbiz.de/10011334328