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The performance of simple fiscal policy rules in monetary union

Vogel, Lukas (contributor); Röger, Werner (contributor); … - European Commission / Directorate-General for Economic … - 2012

The paper analyses the stabilising potential of simple fiscal policy rules for a small open economy in monetary union in a 2-region DSGE model with nominal and real rigidities. We consider simple fiscal instrument rules for government purchases, transfers, and consumption, labour and capital...

Persistent link: https://www.econbiz.de/10015307657

EU fiscal consolidation after the financial crisis : lessons from past experiences

Barrios Cobos, Salvador (contributor); … - European Commission / Directorate-General for Economic … - 2010

The global financial crisis has led to a sharp deterioration of EU countries' public finances. Views are split regarding the most appropriate consolidation strategy to follow, in particular considering: the timing of fiscal consolidation in relation to the path of economic recovery reflecting...

Persistent link: https://www.econbiz.de/10015311769

The cyclically-adjusted budget balance in EU fiscal policy making : a love at first sight turned into a mature relationship

Larch, Martin (contributor); Turrini, Alessandro (contributor) - European Commission / Directorate-General for Economic … - 2009

The cyclically-adjusted budget balance (CAB) plays a key role in the fiscal surveillance framework of the Economic and Monetary Union. It started off in a supporting role in the shadow of the headline deficit and, before long, turned into the linchpin of the rules and requirements of the...

Persistent link: https://www.econbiz.de/10015312109

Italy in EMU : the challenges of adjustment and growth

Buti, Marco (contributor) - European Commission - 2009

Italy's adoption of the euro in 1999 was hailed as a major political achievement and an opportunity to secure macroeconomic stability and push through reforms which domestic institutional and political weaknesses would otherwise have made difficult. At the same time, it was clear that the single...

Persistent link: https://www.econbiz.de/10015312862

QUEST III, an estimated DSGE model of the euro area with fiscal and monetary policy

Ratto, Marco (contributor); Röger, Werner (contributor); … - European Commission / Directorate-General for Economic … - 2008

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...

Persistent link: https://www.econbiz.de/10015313360

Constricted, lame and pro-cyclical? : fiscal policy in the euro area revisited

Deroose, Servaas (contributor); Larch, Martin (contributor); … - European Commission / Directorate-General for Economic … - 2008

It is often argued that fiscal stabilisation in the euro area compares unfavourably with the US, not least because of the perceived limitations of the Stability and Growth Pact. This paper qualifies this perception by taking a closer look at fiscal policy making since the mid-1990s. It examines...

Persistent link: https://www.econbiz.de/10015313370

Structural reforms in the EU : a simulation-based analysis using the QUEST model with endogenous growth

Röger, Werner (contributor); Varga, Janos (contributor); … - European Commission / Directorate-General for Economic … - 2008

, subsidies and education expenditures, administrative costs faced by firms and regulatory indices. Our results confirm the …

Persistent link: https://www.econbiz.de/10015313375

Adjustment dynamics in the euro area : a fresh look at the role of fiscal policy using a DSGE approach

Kincaid, G. Russell (contributor) - European Commission / Directorate-General for Economic … - 2008

Dynamic stochastic general equilibrium (DSGE) models typically (as do most models) treat government spending as wasteful; such spending does not contribute to enhancing private sector utility or productivity. Some researchers have recently introduced productive government investment spending...

Persistent link: https://www.econbiz.de/10015313388

Defying the 'Juncker curse' : can reformist governments be re-elected?

Buti, Marco (contributor); Turrini, Alessandro (contributor) - European Commission / Directorate-General for Economic … - 2008

European policy makers, notably in the euro area, seem to take for granted that the electorate will punish them for bold reform in product and labour markets. This may explain why progress in the euro area has been comparatively limited. This paper posits and, using a dataset for 21 OECD...

Persistent link: https://www.econbiz.de/10015313396

Fiscal policy and the cycle in the euro area : the role of government revenue and expenditure

Turrini, Alessandro (contributor) - European Commission / Directorate-General for Economic … - 2008

on the distinct role of government revenue and expenditure. The estimation of separate fiscal policy reaction functions … bias is found in bad times. The separate estimation of reaction functions for revenue and expenditure policy indicates that … this pro-cyclical bias is an entirely expenditure-driven phenomenon. Probit regressions also reveal that the risk of pro …

Persistent link: https://www.econbiz.de/10015313397