Jump starting the euro area recovery: would a rise in core fiscal spending help the periphery?
"We show that a fiscal expansion by the core economies of the euro area would have a large and positive impact on periphery GDP assuming that policy rates remain low for a prolonged period. Under our preferred model specification, an expansion of core government spending equal to one percent of...
| Main Authors: | , , |
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| Institution: | ETUI-European Trade Union Institute |
| Format: | TEXT |
| Language: | English |
| Published: |
Stockholm
2015
Sveriges Risksbank |
| Subjects: | |
| Online Access: | https://www.labourline.org/KENTIKA-19100591124919287739-Jump-starting-the-euro-area-re.htm |
| _version_ | 1771659896531451906 |
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| author | Blanchard, Olivier Erceg, Christopher J. Lindé, Jesper |
| author_facet | Blanchard, Olivier Erceg, Christopher J. Lindé, Jesper |
| collection | Library items |
| description | "We show that a fiscal expansion by the core economies of the euro area would have a large and positive impact on periphery GDP assuming that policy rates remain low for a prolonged period. Under our preferred model specification, an expansion of core government spending equal to one percent of euro area GDP would boost periphery GDP around 1 percent in a liquidity trap lasting three years, about half as large as the effect on core GDP. Accordingly, under a standard ad hoc loss function involving output and inflation gaps, increasing core spending would generate substantial welfare improvements, especially in the periphery. The benefits are considerably smaller under a utility-based welfare measure, reflecting in part that higher net exports play a material role in raising periphery GDP." |
| format | TEXT |
| geographic | EU countries |
| id | 19100591124919287739_ba341b76bcaf4580a98fe86e041f1ebb |
| institution | ETUI-European Trade Union Institute |
| is_hierarchy_id | 19100591124919287739_ba341b76bcaf4580a98fe86e041f1ebb |
| is_hierarchy_title | Jump starting the euro area recovery: would a rise in core fiscal spending help the periphery? |
| language | English |
| physical | 82 p. Digital |
| publishDate | 2015 |
| publisher | Stockholm Sveriges Risksbank |
| spellingShingle | Blanchard, Olivier Erceg, Christopher J. Lindé, Jesper EMU fiscal policy monetary policy welfare economics Jump starting the euro area recovery: would a rise in core fiscal spending help the periphery? |
| thumbnail | https://www.labourline.org/Image_prev.jpg?Archive=136909195418 |
| title | Jump starting the euro area recovery: would a rise in core fiscal spending help the periphery? |
| topic | EMU fiscal policy monetary policy welfare economics |
| url | https://www.labourline.org/KENTIKA-19100591124919287739-Jump-starting-the-euro-area-re.htm |