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Exchange rate shocks and inflation comovement in the euro area
Leiva-Leon, Danilo; Martínez-Martín, Jaime; Ortega, Eva - 2020
This paper decomposes the time-varying effect of exogenous exchange rate shocks on euro area countries in ation into country-specific (idiosyncratic) and region-wide (common) components. To do so, we propose a exible empirical framework based on dynamic factor models subject to drifting...
Persistent link: https://www.econbiz.de/10012181317
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Gambling to preserve price (and fiscal) stability
Corsetti, Giancarlo; Maćkowiak, Bartosz - 2023
uncorrected, must cause inflation, but the imbalance may get corrected in the future with some probability. By maintaining price …
Persistent link: https://www.econbiz.de/10014376056
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Fiscal reaction function and fiscal fatigue : evidence for the euro area
Checherita-Westphal, Cristina; Žďárek, Václav - 2017
This paper estimates a fiscal reaction function (FRF) framework for euro area countries and derives a novel approach to measure fiscal fatigue. As in previous studies, we find evidence that euro area sovereigns abide, on average, by (weak) sustainability constraints. The primary balance improves...
Persistent link: https://www.econbiz.de/10011637036
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Inflation and fiscal policy : is there a threshold effect in the fiscal reaction function?
Briodeau, Clémence; Checherita-Westphal, Cristina - 2023
changes in inflation on fiscal policy. We find evidence of non-linear short-term effects of HICP inflation on the primary … an inflation turning point - beyond which its short-term (contemporaneous) impact on the primary balance starts being … the whole sample of euro area countries in 2022 (EA-19). Using an alternative measure of "inflation surprise" (available …
Persistent link: https://www.econbiz.de/10014483665
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Monetary-fiscal policy interactions when price stability occasionally takes a back seat
Schmidt, Sebastian - 2024
. The risk of future regime shifts has encompassing effects on equilibrium. Inflation is systematically higher than it would … stability. This inflation bias is increasing in the real value of government debt. Regime-switching probabilities are not … interest rate sufficiently moderately when inflation increases. Lower fiscal dominance risk, in turn, mitigates the inflation …
Persistent link: https://www.econbiz.de/10014484339
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Subsidising car purchases in the euro area : any spill-over on production?
Paredes, Joan - 2017
Due to input-output linkages, an industry level shock can widely transmit to the rest of the economy. We identify government policies on the automobile industry, which change final prices and estimate their effect on sales and production. An example could be the scrappage schemes that many...
Persistent link: https://www.econbiz.de/10011710106
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Fiscal policy and inflation volatility
Rother, Philipp C. - 2004
Among the harmful effects of inflation, the negative consequences of inflation volatility are of particular concern … inflation volatility. Major results are robust for unconditional and conditional inflation volatility, the latter derived from …
Persistent link: https://www.econbiz.de/10009636540
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Fiscal policy shocks in the euro area and the US : an empirical assessment
Burriel, Pablo; Castro, Francisco de; Garrote, Daniel - 2009
We analyse the impact of fiscal policy shocks in the euro area as a whole, using a newly available quarterly dataset of fiscal variables for the period 1981-2007. To allow for comparability with previous results on euro area countries and the US, we use a standard structural VAR framework, and...
Persistent link: https://www.econbiz.de/10003969292
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The impact of constrained monetary policy on the fiscal multipliers on output and inflation
Bletzinger, Tilman; Lalik, Magdalena - 2017
on output and, in particular, also on inflation in the euro area under alternative settings for monetary policy. We … that this over-proportionality is stronger for the fiscal multiplier on inflation than on output. We relate this finding to …
Persistent link: https://www.econbiz.de/10011637428
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Euro area inflation differentials : the role of fiscal policies revisited
Checherita-Westphal, Cristina; Leiner-Killinger, Nadine; … - 2023
This paper provides a comprehensive empirical analysis of the role of discretionary fiscal policy for inflation … is difficult to find robust evidence of the fiscal policy stance or impulse impacting directly on inflation differentials …. We do find, however, support for an indirect effect of discretionary fiscal policy on inflation differentials working …
Persistent link: https://www.econbiz.de/10013547978