2000 - ECB
... interpreted as a result of the country’s need to finance investments. As far as the compatibility of Greek legislation – including the Statute of the Bank of Greece – with the requirements for the introduction of the euro laid down in the Treaty and the Statute of the ESCB is concerned, the followin ...
... interpreted as a result of the country’s need to finance investments. As far as the compatibility of Greek legislation – including the Statute of the Bank of Greece – with the requirements for the introduction of the euro laid down in the Treaty and the Statute of the ESCB is concerned, the followin ...
What drives the short-run costs of fiscal consolidation?
... faced by several economies in the current post-crisis environment. But, at a minimum, our evidence should raise doubts about studies claiming that based on historical evidence post-crisis multipliers are necessarily, or everywhere, large post crisis. Our analysis also sheds some light on the transmi ...
... faced by several economies in the current post-crisis environment. But, at a minimum, our evidence should raise doubts about studies claiming that based on historical evidence post-crisis multipliers are necessarily, or everywhere, large post crisis. Our analysis also sheds some light on the transmi ...
WP/16/39 Governments and Promised Fiscal Consolidations
... fiscal performance in 17 OECD countries during 1978-2015. 4 We find that fiscal promise gaps were sizeable (about 0.3 percent of GDP per year, or 1.1 percent of GDP over a typical 3-year adjustment episode). Economic factors and forecast errors were important in explaining the differences between bu ...
... fiscal performance in 17 OECD countries during 1978-2015. 4 We find that fiscal promise gaps were sizeable (about 0.3 percent of GDP per year, or 1.1 percent of GDP over a typical 3-year adjustment episode). Economic factors and forecast errors were important in explaining the differences between bu ...
Fiscal Rules and Resource Funds in Nonrenewable Resource
... savings and sustainability.6 In some cases, fiscal rules have also been motivated by political economy factors: they have been seen as potentially useful instruments to address spending pressures or to enhance the credibility of the government. About one-third of the oil-exporting countries in Villa ...
... savings and sustainability.6 In some cases, fiscal rules have also been motivated by political economy factors: they have been seen as potentially useful instruments to address spending pressures or to enhance the credibility of the government. About one-third of the oil-exporting countries in Villa ...
The Identification of Fiscal and Monetary Policy in a Structural VAR
... responses to shocks considered acceptable from the possible choice of orthogonal systems (Faust, 1998; Canova and de Nicoló, 2002; and Mountford and Uhlig, 2005). The third approach is to take account of the longer run properties of the model, in one form as a vector error correction model (VECM), o ...
... responses to shocks considered acceptable from the possible choice of orthogonal systems (Faust, 1998; Canova and de Nicoló, 2002; and Mountford and Uhlig, 2005). The third approach is to take account of the longer run properties of the model, in one form as a vector error correction model (VECM), o ...
Monetary-Fiscal Interactions and the Euro Area’s Malaise ∗ Marek Jaroci´ nski
... With this configuration of policy, the model has a unique solution for output, inflation, and the central bank’s interest rate, and the solution converges to the intended steady state. For plausible parameter values, output is much higher and inflation somewhat higher than in the baseline simulation ...
... With this configuration of policy, the model has a unique solution for output, inflation, and the central bank’s interest rate, and the solution converges to the intended steady state. For plausible parameter values, output is much higher and inflation somewhat higher than in the baseline simulation ...
- Department of Economics
... reported by the authorities is the one that provides a statistical equivalent to their complex rules for determining sustainable income.8 They then apply this filter to revenues from other countries to compute their ‘structural balances’. The results for South Africa are presented in Figure 4, which ...
... reported by the authorities is the one that provides a statistical equivalent to their complex rules for determining sustainable income.8 They then apply this filter to revenues from other countries to compute their ‘structural balances’. The results for South Africa are presented in Figure 4, which ...
Fiscal Policy as a Stabilization Tool
... this relationship. The optimism of the expansion years is crucial to understanding the evolution of debt levels in advanced economies, especially in the United States. The failure of the Stability and Growth Pact in Europe was not about the long-term goals around which it was designed. The exact tar ...
... this relationship. The optimism of the expansion years is crucial to understanding the evolution of debt levels in advanced economies, especially in the United States. The failure of the Stability and Growth Pact in Europe was not about the long-term goals around which it was designed. The exact tar ...
Fiscal Policy in the EMU and Outside
... stated under whtch conditions these actions should be undertaken. These criteria for public deficits and debts have been vividly debated with some arguing that they primarily serve a role in the transition period as convergence requirements. While others stress that they are important to make the EM ...
... stated under whtch conditions these actions should be undertaken. These criteria for public deficits and debts have been vividly debated with some arguing that they primarily serve a role in the transition period as convergence requirements. While others stress that they are important to make the EM ...
is the price level determined by the needs of fiscal solvency?
... may limit the way in which monetary policy can be modeled. For example, Woodford (1995) shows that the price level is not pinned down if the central bank tries to peg the interest rate in an R regime, but that it would be uniquely determined in an NR regime.5 In addition, the choice of regime affect ...
... may limit the way in which monetary policy can be modeled. For example, Woodford (1995) shows that the price level is not pinned down if the central bank tries to peg the interest rate in an R regime, but that it would be uniquely determined in an NR regime.5 In addition, the choice of regime affect ...
Euro area fiscal stance - European Commission
... recommendation regarding the euro area fiscal stance should err on the side of caution. The metrics developed in this paper should not be considered as conclusive measures of stabilisation and sustainability objectives. In particular, the reliance on output gap estimates makes the calculation of sta ...
... recommendation regarding the euro area fiscal stance should err on the side of caution. The metrics developed in this paper should not be considered as conclusive measures of stabilisation and sustainability objectives. In particular, the reliance on output gap estimates makes the calculation of sta ...
The cyclicality of fiscal policy in South Asia
... Several explanations have been put forward for procyclical fiscal policies in developing countries. The first one is the financial market imperfections argument, also known as the structural argument. According to this argument limited integration (or access) to domestic and external financial market ...
... Several explanations have been put forward for procyclical fiscal policies in developing countries. The first one is the financial market imperfections argument, also known as the structural argument. According to this argument limited integration (or access) to domestic and external financial market ...
Non-Keynesian Effects of Fiscal Policy in the EU
... an increase of government spending crowds out private consumption because of an expectation of higher future taxes and an expectation that permanent income is indeed lower. If however, public expenses keep rising, beyond a certain limit there will be also an increased probability that a fiscal conso ...
... an increase of government spending crowds out private consumption because of an expectation of higher future taxes and an expectation that permanent income is indeed lower. If however, public expenses keep rising, beyond a certain limit there will be also an increased probability that a fiscal conso ...
Fiscal Policy in Response to Climate Variability in
... growth and higher prices than optimal. The study also found that fiscal discretion often undermines the effectiveness of the monetary policy commitment. Niemann and Pichler (2010) developed a stochastic model of optimal fiscal and monetary policies in an economy facing rare disasters, as defined by ...
... growth and higher prices than optimal. The study also found that fiscal discretion often undermines the effectiveness of the monetary policy commitment. Niemann and Pichler (2010) developed a stochastic model of optimal fiscal and monetary policies in an economy facing rare disasters, as defined by ...
Austerity in 2009-2013
... allows us to analyze not only the output effects of austerity as actually implemented, but also to ask what the effect on output growth would have been, had the same fiscal contractions been implemented in a different fashion, e.g. relying less on tax increases and more on spending cuts. Our main fi ...
... allows us to analyze not only the output effects of austerity as actually implemented, but also to ask what the effect on output growth would have been, had the same fiscal contractions been implemented in a different fashion, e.g. relying less on tax increases and more on spending cuts. Our main fi ...
Asymmetric Fiscal Policy Shocks
... should run fiscal stimulus packages in order to restore previous growth rates or run an austerity program to reduce deficits and in the long-run debt as a percent of GDP. Recently for example, highly indebted Eurozone countries (Greece, Ireland, Portugal and Spain) are required to implement fiscal a ...
... should run fiscal stimulus packages in order to restore previous growth rates or run an austerity program to reduce deficits and in the long-run debt as a percent of GDP. Recently for example, highly indebted Eurozone countries (Greece, Ireland, Portugal and Spain) are required to implement fiscal a ...
Teacher`s bookleT - Generation Euro Students` Award
... of the European System of Central Banks (ESCB) and of the European Central Bank. The ECB was established as the core of the Eurosystem and the ESCB. The ECB and the NCBs together perform the tasks that they have been assigned. The ESCB comprises the ECB and the NCBs of all Member States, irrespectiv ...
... of the European System of Central Banks (ESCB) and of the European Central Bank. The ECB was established as the core of the Eurosystem and the ESCB. The ECB and the NCBs together perform the tasks that they have been assigned. The ESCB comprises the ECB and the NCBs of all Member States, irrespectiv ...
Is discretionary fiscal policy a mitigating mechanism that coun
... of fiscal policy is that the government itself might seek to win short-term gains that are they may use fiscal policy in a non-utilizing way in order to win election. Such behaviour is most likely to be welfare worsening and not have a stabilizing effect on the economy in long run. 1.2 Discussion of ...
... of fiscal policy is that the government itself might seek to win short-term gains that are they may use fiscal policy in a non-utilizing way in order to win election. Such behaviour is most likely to be welfare worsening and not have a stabilizing effect on the economy in long run. 1.2 Discussion of ...
103187205I_en.pdf
... a decision rule that depends on past, current and future variables. A passive fiscal or monetary policy or authority is constrained by consumer optimizing conditions and the actions of the active authority. For example, if fiscal policy is passive, the fiscal authority’s decision rule will necessari ...
... a decision rule that depends on past, current and future variables. A passive fiscal or monetary policy or authority is constrained by consumer optimizing conditions and the actions of the active authority. For example, if fiscal policy is passive, the fiscal authority’s decision rule will necessari ...
The Effects of Fiscal Policy on Consumption in Good and Bad Times
... to a lesser degree, if at all. The empirical specification in this paper is guided by the theoretical frameworks in Perotti (1999) and Tagkalakis (2008). Both studies emphasize how a portion of liquidity constrained households may alter the fiscal policy’s transmission mechanism. Second, throughout ...
... to a lesser degree, if at all. The empirical specification in this paper is guided by the theoretical frameworks in Perotti (1999) and Tagkalakis (2008). Both studies emphasize how a portion of liquidity constrained households may alter the fiscal policy’s transmission mechanism. Second, throughout ...
View/Open
... domestic central banks as it was perceived that central bank independence would imply greater price stability, given that fiscal dominance would then be precluded. There were also calls for the formation of independent national fiscal policy councils for the setting of annual deficit limits. In fa ...
... domestic central banks as it was perceived that central bank independence would imply greater price stability, given that fiscal dominance would then be precluded. There were also calls for the formation of independent national fiscal policy councils for the setting of annual deficit limits. In fa ...
Monetary-fiscal policy mix with financial frictions (1 MB )
... most of these papers focus on the size of government spending multipliers, less attention has been devoted to the role of debt and its financing With this aim, we show that both tax cuts and government spending shocks are more expansionary under fiscal dominance. Moreover, transmission mechanisms un ...
... most of these papers focus on the size of government spending multipliers, less attention has been devoted to the role of debt and its financing With this aim, we show that both tax cuts and government spending shocks are more expansionary under fiscal dominance. Moreover, transmission mechanisms un ...
Britain`s fiscal watchdog: a view from the kennel
... forecasts itself. It has in effect ‘contracted out’ the task of producing the official forecasts to the OBR and ministers then have to decide how to respond to them. This requires the OBR to interact more closely with ministers and officials as they make their fiscal policy decisions than most ot ...
... forecasts itself. It has in effect ‘contracted out’ the task of producing the official forecasts to the OBR and ministers then have to decide how to respond to them. This requires the OBR to interact more closely with ministers and officials as they make their fiscal policy decisions than most ot ...
Fiscal Policy and the Current Account
... corroborate each other. The sample includes about a hundred countries over a period of more than two decades. The estimates distinguish among advanced and emerging/low-income countries; more and less open economies; and country-years with small and large output gaps. While the analysis was also cond ...
... corroborate each other. The sample includes about a hundred countries over a period of more than two decades. The estimates distinguish among advanced and emerging/low-income countries; more and less open economies; and country-years with small and large output gaps. While the analysis was also cond ...
del02-berger-dehaan 221141 en
... on monetary policy in the FOMC. While no direct evidence of such behavior exists for today’s ECB, these authors argue that recent interest rate decisions by the ECB Council at least do not allow rejecting the hypothesis that national central bank governors vote with a regional bias in the euro area ...
... on monetary policy in the FOMC. While no direct evidence of such behavior exists for today’s ECB, these authors argue that recent interest rate decisions by the ECB Council at least do not allow rejecting the hypothesis that national central bank governors vote with a regional bias in the euro area ...
Stability and Growth Pact
The Stability and Growth Pact (SGP) is an agreement, among the 28 Member states of the European Union, to facilitate and maintain the stability of the Economic and Monetary Union (EMU). Based primarily on Articles 121 and 126 of the Treaty on the Functioning of the European Union, it consists of fiscal monitoring of members by the European Commission and the Council of Ministers, and the issuing of a yearly recommendation for policy actions to ensure a full compliance with the SGP also in the medium-term. If a Member State breaches the SGP's outlined maximum limit for government deficit and debt, the surveillance and request for corrective action will intensify through the declaration of an Excessive Deficit Procedure (EDP); and if these corrective actions continue to remain absent after multiple warnings, the Member State can ultimately be issued economic sanctions. The pact was outlined by a resolution and two council regulations in July 1997. The first regulation ""on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies"", known as the ""preventive arm"", entered into force 1 July 1998. The second regulation ""on speeding up and clarifying the implementation of the excessive deficit procedure"", known as the ""dissuasive arm"", entered into force 1 January 1999.The purpose of the pact was to ensure that fiscal discipline would be maintained and enforced in the EMU. All EU member states are automatically members of both the EMU and the SGP, as this is defined by paragraphs in the EU Treaty itself. The fiscal discipline is ensured by the SGP by requiring each Member State, to implement a fiscal policy aiming for the country to stay within the limits on government deficit (3% of GDP) and debt (60% of GDP); and in case of having a debt level above 60% it should each year decline with a satisfactory pace towards a level below. As outlined by the ""preventive arm"" regulation, all EU member states are each year obliged to submit a SGP compliance report for the scrutiny and evaluation of the European Commission and the Council of Ministers, that will present the country's expected fiscal development for the current and subsequent three years. These reports are called ""stability programmes"" for eurozone Member States and ""convergence programmes"" for non-eurozone Member States, but despite having different titles they are identical in regards of the content. After the reform of the SGP in 2005, these programmes have also included the Medium-Term budgetary Objectives (MTO's), being individually calculated for each Member State as the medium-term sustainable average-limit for the country's structural deficit, and the Member State is also obliged to outline the measures it intends to implement to attain its MTO. If the EU Member State does not comply with both the deficit limit and the debt limit, a so-called ""Excessive Deficit Procedure"" (EDP) is initiated along with a deadline to comply, which basically includes and outlines an ""adjustment path towards reaching the MTO"". This procedure is outlined by the ""dissuasive arm"" regulation.The SGP was initially proposed by German finance minister Theo Waigel in the mid-1990s. Germany had long maintained a low-inflation policy, which had been an important part of the German economy's strong performance since the 1950s. The German government hoped to ensure the continuation of that policy through the SGP, which would ensure the prevalence of fiscal responsibility, and limit the ability of governments to exert inflationary pressures on the European economy. As such, it was also described to be a key tool for the Member States adopting the euro, to ensure that they did not only meet the Maastricht convergence criteria at the time of adopting the euro, but kept on to comply with the fiscal criteria for the following years.