Template-type: ReDif-Paper 1.0
Author-Name: Bicu, A.C.
Author-workplace-name: General Economics 0 (Onderwijs)
Author-Name: Lieb, L.M.
Author-workplace-name: Macro, International & Labour Economics
Title: Cross-border effects of fiscal policy in the Eurozone
Abstract: We empirically assess spillovers from fiscal policy in the Euro area. We propose a structural multi-country factor-augmented vector autoregression model identified with sign restrictions and analyse the domestic and international effects of fiscal policy measures. By extracting information from an extended set of country specific and cross-border variables, we are able to account for the different channels through which government expenditure shocks are transmitted within as well as across borders. We find significant negative effects of fiscal consolidations on domestic output, private consumption and investment. More importantly, spending cuts in Italy and Spain induce significant and persistent output spillovers on Germany and France.
Series: GSBE Research Memoranda
Creation-Date: 20150101
Number: 019
File-URL: https://cris.maastrichtuniversity.nl/ws/files/1233015/guid-68b1a4c5-27b6-4f48-af7a-b2b60d70a5ac-ASSET1.0.pdf
File-Format: application/pdf
File-Size: 962036
Handle: Repec:unm:umagsb:2015019
DOI: 10.26481/umagsb.2015019