In search of the Euro area fiscal stance

DC FieldValueLanguage
dc.contributor.authorAlbonico, Alice-
dc.contributor.authorPaccagnini, Alessia-
dc.contributor.authorTirelli, Patrizio-
dc.date.accessioned2016-09-02T14:19:51Z-
dc.date.available2016-09-02T14:19:51Z-
dc.date.issued2016-08-
dc.identifier.other201612-
dc.identifier.urihttp://hdl.handle.net/10197/7863-
dc.description.abstractThis paper investigates the role of fiscal policies over the aggregate EMU business cycle. Previous studies, based on the assumption of non-separability between public and private consumptions, obtain a large public consumption multiplier, a small fraction of non-Ricardian households and, consequently, a relatively small multiplier for public transfers. We provide motivations for assuming separability and, on these grounds, we estimate a relatively large share of non-Ricardian households. As a result, we obtain that both multipliers are large. We also find that, in spite of their potentially strong effects, fiscal policies were substantially muted during the EMU years. This result is confirmed even for the post 2007 period. In fact fiscal policies did not complement the monetary policy stimulus in response to the financial crisis. Further, we cannot detect any substantial aggregate effect of austerity measures. Finally, the post-2007 surge in expenditure-to-GDP ratios was apparently determined by non-policy shocks that reduced output growth.en
dc.language.isoenen
dc.publisherUniversity College Dublin. School of Economicsen
dc.relation.ispartofseriesUCD Centre for Economic Research Working Paper Seriesen
dc.relation.ispartofseriesWP2016/12en
dc.subjectDSGEen
dc.subjectLimited asset market participationen
dc.subjectBayesian estimationen
dc.subjectEuro areaen
dc.subjectBusiness cycleen
dc.subjectMonetary policyen
dc.subjectFiscal policyen
dc.subject.classificationC11en
dc.subject.classificationC13en
dc.subject.classificationC32en
dc.subject.classificationE21en
dc.subject.classificationE32en
dc.subject.classificationE37en
dc.titleIn search of the Euro area fiscal stanceen
dc.typeWorking Paperen
dc.statusNot peer revieweden
dc.identifier.startpage1en
dc.identifier.endpage23en
dc.neeo.contributorAlbonico|Alice|aut|-
dc.neeo.contributorPaccagnini|Alessia|aut|-
dc.neeo.contributorTirelli|Patrizio|aut|-
dc.date.updated2016-08-23-
item.grantfulltextopen-
item.fulltextWith Fulltext-
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