This note describes model simulations that broadly confirm the view that at the current juncture, with monetary policy constrained by the zero interest rate floor, a debt-financed increase in government investment in surplus countries will have positive GDP spillovers to the rest of the euro...

This paper analyses the stabilising properties of a European Banking Union in case of financial shocks in the euro area. We compare output losses under national interventions ('bail-out') with resolution mechanisms included in the banking union, namely resolution via the euro area's Single...

We estimate a three-country model using 1995-2013 data for Germany, the Rest of the Euro Area (REA) and the Rest of the World (ROW) to analyze the determinants of Germany's current account surplus after the launch of the Euro. The most important factors driving the German surplus were positive...

This paper studies the effectiveness of Euro Area (EA) fiscal policy, during the recent financial crisis, using an estimated New Keynesian model with a bank. A key dimension of policy in the crisis was massive government support for banks-that dimension has so far received little attention in...

This paper develops a DSGE model for an open economy and estimates it on euro area data using Bayesian estimation techniques. The model features nominal and real frictions, as well as financial frictions in the form of liquidity constrained households. The model incorporates active monetary and...

This paper uses an estimated DSGE model for the euro area to study the effects of fiscal stabilisation policies. There are at least two features of the euro area economy which makes this analysis interesting. First, there are nominal rigidities in goods and labour markets, and there are...

This paper applies Bayesian estimation techniques to a time series data set of the euro area and presents estimates of a DSGE model. The purpose of this paper is not to estimate the current version of the QUEST model directly with these methods but rather to estimate a prototype new generation...