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The (subjective) well-being cost of fiscal policy shocks

Eklou, Kodjovi M.; Fall, Mamour - 2020

Do discretionary spending cuts and tax increases hurt social well-being? To answer this question, we combine subjective well-being data covering over half a million of individuals across 13 European countries, with macroeconomic data on fiscal consolidations. We find that fiscal consolidations...

Persistent link: https://www.econbiz.de/10012170083

The fiscal state-dependent effects of capital income tax cuts

Fotiou, Alexandra; Shen, Wenyi; Yang, Shu-Chun S. - 2020

Using the post-WWII data of U.S. federal corporate income tax changes, within a Smooth Transition VAR, this paper finds that the output effect of capital income tax cuts is government debt-dependent: it is less expansionary when debt is high than when it is low. To explore the mechanisms that...

Persistent link: https://www.econbiz.de/10012251390

Government spending effects in a policy constrained environment

Mao, Ruoyun; Yang, Shu-Chun S. - 2020

The theoretical literature generally finds that government spending multipliers are bigger than unity in a low interest rate environment. Using a fully nonlinear New Keynesian model, we show that such big multipliers can decrease when 1) an initial debt-to-GDP ratio is higher, 2) tax burden is...

Persistent link: https://www.econbiz.de/10012251969

The Effectiveness of Fiscal Policy in Stimulating Economic Activity : A Review of the Literature

Mahfouz, Selma - 2002

This paper reviews the theoretical and empirical literature on the effectiveness of fiscal policy. The focus is on the size of fiscal multipliers, and on the possibility that multipliers can turn negative (i.e., that fiscal contractions can be expansionary). The paper concludes that fiscal...

Persistent link: https://www.econbiz.de/10014399540

Effects of Fiscal Stimulus in Structural Models

Kumhof, Michael - 2010

The paper assesses, using seven structural models used heavily by policymaking institutions, the effectiveness of temporary fiscal stimulus. Models can, more easily than empirical studies, account for differences between fiscal instruments, for differences between structural characteristics of...

Persistent link: https://www.econbiz.de/10014402816

Mr. Ricardo's Great Adventure : Estimating Fiscal Multipliers in a Truly Intertemporal Model

Sgherri, Silvia - 2006

We estimate tax multipliers in a ""Blanchard-Yaari"" consumption model where Ricardian equivalence is broken because the private sector discounts the future at a faster rate than the real rate of interest. The model fits U.S. data since 1955 extremely well-entailing a discount wedge of around 20...

Persistent link: https://www.econbiz.de/10014402981

Food Prices and the Multiplier Effect of Trade Policy

Giordani, Paolo - 2014

"multiplier effect": when a shock drives up the price of food, exporters respond by imposing restrictions while importers wind … prediction of the theory with a new dataset that comprises monthly information on trade measures across 77 countries and 33 food … products for the period 2008-11, finding evidence of a multiplier effect in food trade policy. These findings contribute to …

Persistent link: https://www.econbiz.de/10014411694

Early Warning Systems : A Survey and a Regime-Switching Approach

Abiad, Abdul - 2003

Previous early-warning systems (EWSs) for currency crises have relied on models that require a priori dating of crises. This paper proposes an alternative EWS, based on a Markov-switching model, which identifies and characterizes crisis periods endogenously; this also allows the model to utilize...

Persistent link: https://www.econbiz.de/10014404016

Fiscal consolidation and public wages

Chang, Juin-jen; Lin, Hsieh-Yu; Traum, Nora; Yang, … - 2019

the substantial contractionary effects of the latter. In addition, the baseline estimation finds that exogenous public …

Persistent link: https://www.econbiz.de/10012102036

A simple macrofiscal model for policy analysis : an application to Cambodia

Baksa, Dániel; Bulíř, Aleš; Heng, Dyna - 2020

The paper describes a semistructural macrofiscal approach to simulating and forecasting macroeconomic policies. Our canonical model is adapted to Cambodia and we demonstrate its application with an illustrative scenario of macroeconomic effects of the Covid-19 pandemic. Complemented with...

Persistent link: https://www.econbiz.de/10012391950