How different are the fiscal policy effects?

It is well-known that estimates of fiscal policy effects differ a lot. In this paper we try get some idea of the magnitude of these differences and the underlying reasons for these differences. In the European Monetary Union we face wide cross-country differences in fiscal institutions and key fisca...

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Detalhes bibliográficos
Autor principal: Viren, Matti
Formato: Article ou chapitre numérique
Idioma:Français
Publicado em: 2014
Assuntos:
Acesso em linha:Accès Université d'Orléans et IFPM
Accès Université d'Orléans et IFPM
Descrição
Resumo:It is well-known that estimates of fiscal policy effects differ a lot. In this paper we try get some idea of the magnitude of these differences and the underlying reasons for these differences. In the European Monetary Union we face wide cross-country differences in fiscal institutions and key fiscal parameters, some of which may also vary over time (business cycle). Moreover, these effects may also depend on trade spillover effects and thus on the extent of policy coordination. Our empirical analyses make use of data for 15 EU countries, mainly for the period 1970-2011. The results clearly indicate that fiscal multipliers are much larger during economic recessions. By contrast, the policy coordination-effects appear to be more homogenous, although it turns out that small countries may benefit more from coordination. Still, cross-country differences seem to dominate these average features of the results.