This paper describes a micro-founded DSGE model with endogenous growth that is used to analyse the macroeconomic impact of structural reforms in Europe. The new QUEST III model is a useful tool for analysing the costs and benefits of reforms in terms of concrete and quantifiable policy measures,...

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 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 analyses non-Keynesian effects in fiscal consolidations in the EU. The analysis is carried out both ex-post, i.e. by looking at the emergence of expansionary consolidations in the past and at their characteristics, and ex-ante, i.e. by simulating with the European Commission QUEST...

This paper calibrates the Roeger-Varga-Veld (2008) micro-founded DSGE model with endogenous growth for all EU member states using country speci c structural characteristics and employs the individual country models to analyse the macroeconomic impact of various struc- tural reforms. We use the...

This paper uses a multi-region dynamic general equilibrium model with collateral constrained households and residential investment to examine the effectiveness of fiscal policy. The presence of credit constrained households makes fiscal policy a more powerful tool for short run stabilisation and...