Instead of relying on descriptive statistics to evaluate the permanence of a fiscal contraction, this paper suggests that this issue should be studied using tests for structural breaks in cointegrating relationships between taxes and spending. We label a fiscal contraction as 'permanent' if a...

In this paper we examine, by means of Monte Carlo simulation, the properties of the so called 'Pantula principle' for the simultaneous determination of rank and deterministic components in a vector error correction model. Examining the five models contained within the Johansen methodology, we...

Recent empirical and theoretical studies have suggested that consumption growth reacts asymmetrically to positive and negative expected income growth. In this paper we investigate if this behavior is robust to a) assumptions on how the households form their expectations of future earnings and b)...

Denna studie visar att utfallet i avtalsrörelsen 2007 har stor betydelse för framtida produktion och sysselsättning. Beräkningar i Konjunkturinstitutets makroekonomiska modell KIMOD visar att parterna kan minska jämviktsarbetslösheten med en procentenhet genom återhållsamma avtal...

We analyse model choices of various international institutions and find that the majority of the studied central banks have chosen so-called DSGE-models. Ministry of finances have chosen to continue using so-called Semi-Structural Models (SSM) while international organisations such as the IMF...

Recent theoretical research suggest that monetary shocks might play an important role in explaining movements in the real exchange rate in the short and medium run. Empirically, the contribution of transitory (monetary) disturbances in explaining the variance decomposition of real exchange rates...

We estimate a so called common trends model of federal taxes and spending in the U.S.. Using dates on presidential terms as well as the NBER business cycle, we are able to interpret the estimated permanent shock as being of structural policy origin and the transitory shock as being of (to...

In the past 10 to 15 years, it has been argued in the literature on "expansionary fiscal contraction" (EFC) that under certain circumstances, fiscal policy has non-Keynesian effects. We show that the real exchange rate depreciated substantially prior to fiscal contractions with a favorable...