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The macroeconomic effects of fiscal consolidation in dynamic general equilibrium
Schwarzmüller, Tim; Wolters, Maik H. - 2014
-run output effects of the different consolidation strategies, but also regarding the welfare effects and the distributional … of credit-constrained households who cannot smooth consumption has a large impact on the overall output and welfare …
Persistent link: https://www.econbiz.de/10010416675
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Fiscal austerity in ambiguous times
Ferrière, Axelle; Karantounias, Anastasios G. - 2016
How should public debt be managed when uncertainty about the business cycle is widespread and debt levels are high, as in the aftermath of the last financial crisis? This paper analyzes optimal fiscal policy with ambiguity aversion and endogenous government spending. We show that, without...
Persistent link: https://www.econbiz.de/10011446558
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Fiscal Multipliers at the Zero Lower Bound : The Role of Policy Inertia
Hills, Timothy - 2015
multiplier nontrivially when the policy rate is constrained at the zero lower bound (ZLB). In the economy with policy inertia … the recession via expectations. In our baseline calibration, the output multiplier at the ZLB is 2.5 when the weight on …
Persistent link: https://www.econbiz.de/10013031117
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Fiscal policy and fiscal fragility : empirical evidence from the OECD
El-Shagi, Makram; Schweinitz, Gregor von - 2019
In this paper, we use local projections to investigate the impact of consolidation shocks on GDP growth, conditional on the fragility of government finances. Based on a database of fiscal plans in OECD countries, we show that spending shocks are less detrimental than tax-based consolidation. In...
Persistent link: https://www.econbiz.de/10012012854
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The government spending multiplier at the zero lower bound : evidence from the United States
Di Serio, Mario; Fragetta, Matteo; Gasteiger, Emanuel - 2020
We estimate state-dependent government spending multipliers for the United States. We use a Factor-Augmented Interacted Vector Autoregression (FAIVAR) model. This allows us to capture the time-varying monetary policy characteristics including the recent zero interest rate lower bound (ZLB)...
Persistent link: https://www.econbiz.de/10012209159
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Did fiscal consolidation cause the double dip recession in the euro area?
Heimberger, Philipp - 2015
closely related to the harshness of fiscal austerity. Cumulative multiplier estimates are found to vary in a range from 1.4 to … 2.1, depending on the data source used to identify the intensity of fiscal consolidation. Given these multiplier values …
Persistent link: https://www.econbiz.de/10011778844
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Fiscal multipliers and the choice of zero lower bound modeling
Siemsen, Thomas; Watzka, Sebastian - 2013
multiplier. To this end we contrast two different ways to implement the ZLB in a New Keynesian model: the ZLB modeled as an … multiplier are not only due to differences in the timing assumption of government spending but also driven by the choice of the … ZLB modeling. Ceteris paribus, the impact multiplier is higher if the ZLB is modeled appropriately as a constraint. …
Persistent link: https://www.econbiz.de/10009772911
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Optimal Government Spending at the Zero Lower Bound : A Non-Ricardian Analysis
Nakata, Taisuke - 2015
variations in the government spending as well as their welfare implications depend importantly on the available tax instrument …
Persistent link: https://www.econbiz.de/10013020784
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Long-run effects of austerity
Martins, Guilherme Klein - 2022
This paper provides evidence that austerity shocks have long-run negative effects on GDP. Besides addressing the important gap in the growing fiscal research regarding the short time horizon of the estimations, this paper analyzes two other important assumptions made in the literature regarding...
Persistent link: https://www.econbiz.de/10014229776
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Day of reckoning : output losses from fiscal stabilizations
Ferraro, Domenico; Peretto, Pietro F. - 2018
We derive the quantitative implications of reducing sustained budget deficits (labeled fiscal stabilizations) in the context of a general equilibrium model of innovation-led growth. In the model, innovation comes from entrant firms creating new products and incumbent firms improving own existing...
Persistent link: https://www.econbiz.de/10012125472