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on Microeconomic European Issues |
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Issue of 2015‒04‒02
24 papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | Johannes S. Kunz (Department of Economics, University of Zurich) |
| Abstract: | In this study, I provide evidence that the educational achievement of second-generation immigrants in German-speaking Switzerland is greater than in Germany. The impact of the first-generation immigrants' destination decision on their offspring's educational achievement seems to be much more important than has been recognized by the existing literature. I identify the test score gap between these students that cannot be explained by differences in individual and family characteristics. Moreover, I show how this gap evolves over the test score distribution and how the least favorably-endowed students fare. My results suggest that the educational system of Switzerland, relative to the German system, enhances the performance of immigrants' children substantially. This disparity is largest when conditioning on the language spoken at home, and prevails even when comparing only students whose parents migrated from the same country of origin. |
| Keywords: | Immigrant comparison, Educational achievement decomposition, Germany and Switzerland |
| JEL: | I21 I24 J15 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iso:educat:0110&r=eur |
| By: | Akgüc, Mehtap (Center for European Policy Studies (CEPS)); Ferrer, Ana (University of Waterloo) |
| Abstract: | Using a recent survey of immigrants to France, we provide a detailed analysis of the educational attainment and labor market performance of various sub-population groups in France. Our results indicate that immigrants to France are less educated than the native born and that these differences can be tracked down to differences in socioeconomic background for most groups of immigrants. Similarly, there is a significant wage gap between immigrant and native-born workers, but this is reduced and sometimes disappears after correcting for selection into employment. In most cases the remaining differences in education and labor market outcomes seem related to the area of origin of the immigrant as well as where the education of the immigrant is obtained. |
| Keywords: | immigration, France, labor market performance of immigrants, educational attainment |
| JEL: | F22 J15 J61 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8925&r=eur |
| By: | Nina Drange; Kjetil Telle (Statistics Norway) |
| Abstract: | Proficiency in the language spoken by the majority population may be crucial for the cognitive development of children from immigrant families. High-quality child care is believed to promote such language skills, and it is thus of concern that children from immigrant families are underrepresented in formal child care across OECD countries. How can we increase their participation, and can such participation improve family integration? We study an intervention in some districts of Oslo where children aged four and five were eligible for twenty hours of free childcare weekly. Taking advantage of the intervention being available in some city districts and not in others, we estimate the effect of the intervention on the enrollment of children and on their parents' employment and education, using outcomes measured for the same family before and after the child's age of eligibility. We find that the intervention increased the participation for children from immigrant families by 15 percent. However, we do not find support for effects on parental employment or education. The performance in tests at school entry (age six) for children from immigrant families in city districts with free child care is better than that of similar children in comparison districts. Overall, our results suggest that subsidizing center based child care can improve the cognitive development of children from immigrant families. |
| Keywords: | child care; education; immigrant children; integration; assimilation |
| JEL: | J13 J15 H52 I28 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:799&r=eur |
| By: | Sebastian Leitner (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Abstract This paper analyses the impacts of the crisis on various groups in the labour market, providing a comparison across groups of EU countries and individual Central and East European new EU Member States. Particularly it reports how the crisis affected the transitions of people between different states in the labour market employment, unemployment, education and inactivity. Based on EU SILC data, a descriptive overview concerning the changes in transition rates is provided by estimating Markov transition probabilities. This is complemented by a set of probit regression results pointing towards significant changes in the various transitions triggered by the crisis. This is particularly the case for the younger age cohorts and low-educated workers. |
| Keywords: | labour market transitions, crisis effects, young cohorts |
| JEL: | E24 J23 J63 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:109&r=eur |
| By: | Albrecht, James (Department of Economics, Georgetown University); Skogman Thoursie, Peter (Department of Economics, Stockholm University); Vroman, Susan (Department of Economics, Georgetown University) |
| Abstract: | In this paper, we update and extend “Is There a Glass Ceiling in Sweden?” (Albrecht et al. 2003) by documenting the extent to which the gender log wage gap across the distribution in Sweden has changed over the period 1998-2008. We then examine the Swedish glass ceiling in 2008 in more detail by documenting how it differs for white-collar versus blue-collar workers and for private- versus public-sector workers. We also examine when in the life cycle the glass ceiling effect arises and how this effect develops around the birth of the first child. Finally, we investigate the possible connection between the glass ceiling and the parental leave system in Sweden by linking wage data with data on parental leave from different Swedish registers. |
| Keywords: | Gender gap; parental leave; quantile regression |
| JEL: | J16 J31 J71 |
| Date: | 2015–03–04 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ifauwp:2015_004&r=eur |
| By: | Adrian Chadi (Institute for Labour Law and Industrial Relations in the EU, University of Trier); Laszlo Goerke (Institute for Labour Law and Industrial Relations in the EU, University of Trier) |
| Abstract: | Economists often interpret absenteeism as an indicator of effort. Using data from the German Socio-Economic Panel (SOEP) study, this paper offers a comprehensive discussion of this view by analysing various forms of job mobility. The evidence reveals a significantly negative (positive) link between sickness-related absence and the probability of a subsequent promotion (dismissal). In line with the interpretation of absenteeism as a proxy for effort, instrumental variable analyses suggest no causal impact of absence behaviour on the likelihood of such career events when variation in illness-related absence is triggered exogenously. We observe no consistent gender differences in the link between absence and subsequent career events. |
| Keywords: | dismissal, gender difference, German Socio-Economic Panel (SOEP), instrumental variables, job mobility, promotion, sickness-related absence |
| JEL: | J16 J22 J63 M51 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:iaa:dpaper:201504&r=eur |
| By: | Gabriella Cagliesi (The University of Greenwich Business School, London); Denise Hawkes (The Institute of Education, University of London); Max Tookey (The University of Greenwich Business School, London) |
| Abstract: | The purpose of this study is to adopt the principles of labour economics, behavioural economics (BE) and social economics (SE) to explain an agent’s functioning over employment, non-employment and across various inactivity categories in the labour market. An empirical methodological approach has been adopted, where data from the British Household Panel Survey (2009) has been collected to formulate two types of models: the first type explaining non-employment and employment between genders, the second type investigating the subset of non-employed people and different categories of non-employment (such as employment (unemployment, students, disabled, early retired and carers), differentiating for gender and age characteristics. We found that labour market opportunities, choices and achievements are all affected by the interrelations and interactions of individual’s demographic and psychological characteristics (such as age, gender, heuristic, perceptions, beliefs, attitude, goals and ambitions) with external factors (such as geographical, socio- cultural and economic conditions). This study makes a unique contribution to labour economics as we abandon the traditional welfare approach and use a more general framework of capabilities and refined functioning (proposed by Amartya Sen) to interpret how different types of constraints - ranging from socioeconomic conditions and environmental background to specific features of individual processes of choices and decision making- affect preferences and functionings. The influences of “under-employment†and “career markers†will also be evaluated in the context of this study. |
| Keywords: | Worklessness, Behavioural Economics, Social Connections, British Household Panel Study |
| JEL: | J60 |
| Date: | 2015–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:qss:dqsswp:1501&r=eur |
| By: | Bjuggren, Carl Magnus (Research Institute of Industrial Economics (IFN)) |
| Abstract: | The theoretical predictions of how employment protection affects firm productivity are ambiguous. In this paper I study the effect of employment protection rules on labor productivity using micro data on Swedish firms. A reform of the employment protection rules in 2001 made it possible for small firms with less than eleven employees to exempt two workers from the seniority rules. I exploit the reform as a natural experiment. My results indicate that increased labor market flexibility increases labor productivity. The increase appears to be driven mainly by the older and the smallest firms. It is not explained by capital intensity or the educational level of workers. |
| Keywords: | Employment Protection; Labor Market Regulations; Labor Productivity; Last-in-First-out Rules |
| JEL: | D22 J23 J24 J32 J38 K31 M51 |
| Date: | 2015–03–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1061&r=eur |
| By: | Aiello, Francesco; Ricotta, Fernanda |
| Abstract: | This paper analyses the TFP heterogeneity of a sample of manufacturing firms operating in seven EU countries (Austria, France, Germany, Hungary, Italy, Spain and UK). TFP data refer to 2008. The empirical setting is based on the multilevel modelling which provides two main results. Firstly, we show that TFP heterogeneity is largely due to firm-specific features (85% of TFP variability in the empty-model). Interestingly, we find that some key-drivers of TFP (size, family-management, group membership, innovations and human capital) influence heterogeneity in productivity with the expect sign, but do not, on the whole, absorb much of firm-TFP variance, implying that differences in productivity are due to sizable yet unobservable firm characteristics. Secondly, as far the role of localization is concerned, we demonstrate that country-effect is more influential than region-effect in explaining individual productivity. Net of the country-effect, the localisation in different European regions explains about 5% of TFP firm heterogeneity. When considering the case of three individual countries (France, Italy and Spain), location in different regions explains 5.3% of TFP heterogeneity in Italy, while this proportion is lower (3.6%) in France and higher (9.9%) in Spain. |
| Keywords: | TFP heterogeneity, firm-behavior, localization, European countries, multilevel model |
| JEL: | C30 D22 D24 L60 R11 R15 |
| Date: | 2014–05–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:63234&r=eur |
| By: | Gabriele Pellegrino (University of Sussex) |
| Abstract: | This paper examines how firm age can affect a firm’s perception of the obstacles (deterring vs. revealed) that hamper and delay innovation. Using a comprehensive panel of Spanish firms for the period 2004-2011, the empirical analysis conducted shows that distinct types of obstacle are perceived differently by firms of different ages. First, a clear-cut negative relationship is identified between firm age and a firm’s assessment of both the internal and external shortages of financial resources. Second, young firms seem to be less sensitive to the lack of qualified personnel when initiating an innovative project than when they are already engaged in such activities. By contrast, the attempts of mature firms to engage in innovation activity are significantly affected by the lack of qualified personnel. Finally, mature incumbents appear to attach greater importance to obstacles related to market structure and demand than is the case of firms with less experience. |
| Keywords: | Barriers to innovation, firm age, probit panel data model |
| JEL: | C23 O31 O32 O33 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:doc2015-3&r=eur |
| By: | Becker, Lasse |
| Abstract: | In the European Union (EU), twenty Member States offer public innovation support for private research and development (R&D) activities through either subsidies or a combination of tax cuts and subsidies. Existing studies show ambiguous results regarding the effectiveness of public innovation support in different countries. Accordingly, following a description of the current public innovation framework in Europe, this paper analyses data from the European Community Innovation Survey concerning the effectiveness of public support. The measures chosen relate to changes in turnover as well as the number of employees and labour productivity (measured as turnover per employee) between 2006 and 2008. The paper finds a positive influence of public innovation support on labour productivity in an innovating company, a negative influence on turnover changes and a negative yet not significant influence on the development of employment. The influences of these factors are very weak, whereas other coefficients such as the money spent on innovative activities clearly show positive effects for all three indicators. |
| Keywords: | innovation,innovation support,labor productivity,Europe,effectiveness |
| JEL: | O31 O38 H21 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:236&r=eur |
| By: | Daunfeldt, Sven-Olof (HUI Research); Elert, Niklas (Research Institute of Industrial Economics (IFN)); Johansson, Dan (HUI Research) |
| Abstract: | It is frequently argued that policymakers should target high-tech firms, i.e., firms with high R&D intensity, because such firms are considered more innovative and therefore potential fast-growers. This argument relies on the assumption that the association among high-tech status, innovativeness and growth is actually positive. We examine this assumption by studying the industry distribution of high-growth firms (HGFs) across all 4-digit NACE industries, using data covering all limited liability firms in Sweden during the period 1997–2008. The results of fractional logit regressions indicate that industries with high R&D intensity, ceteris paribus, can be expected to have a lower share of HGFs than can industries with lower R&D intensity. The findings cast doubt on the wisdom of targeting R&D industries or subsidizing R&D to promote firm growth. In contrast, we find that HGFs are overrepresented in knowledge-intensive service industries, i.e., service industries with a high share of human capital. |
| Keywords: | Entrepreneurship; Firm growth; Gazelles; High-growth firms; High-impact firms; Innovation; R&D |
| JEL: | L11 L25 |
| Date: | 2015–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1062&r=eur |
| By: | Roberto Antonietti (University of Padova); Raffaello Bronzini (Bank of Italy); Giulio Cainelli (Unicversity of Padova) |
| Abstract: | This paper investigates empirically whether inward greenfield foreign direct investment (FDI) is related to greater sectorial innovation in the host Italian provinces. We combine several sources of data to estimate panel count models, regressing the annual number of patents in each province and industry against a series of lagged FDI variables. Our results show that a positive relationship between FDI and local patenting emerges only for services. In particular, we find that greater inward FDI in services positively influences local patenting activity in knowledge-intensive business services. These results are robust to endogeneity and the inclusion of province controls and fixed effects. |
| Keywords: | inward greenfield FDI, innovation, patents, research and development, panel count models |
| JEL: | F14 F23 O31 C23 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1006_15&r=eur |
| By: | Bassanini, Andrea (OECD); Brunello, Giorgio (University of Padova); Caroli, Eve (Université Paris-Dauphine) |
| Abstract: | We investigate the role of local social pressure in shaping the geographical pattern of firms' firing decisions. Using French linked employer-employee data, we show that social pressure exerted by the local communities where firms' headquarters are located induces CEOs to refrain from dismissing at short distance from their headquarters. More specifically, we find that, within firms, secondary establishments located further away from headquarters have higher dismissal rates than those located closer, taking into account the possible endogeneity of plant location. We also find that the positive effect of distance on dismissals increases with the visibility of the firm in the local community of its headquarters. These effects are stronger the greater the degree of selfishness of the community in which the headquarters are located. This suggests that local social pressure at headquarters is a key determinant of the positive relationship between distance to headquarters and dismissals. We show that our results cannot be entirely accounted for by alternative explanations of the distance-dismissal relationship that are put forward in the literature – e.g. monitoring costs or asymmetric information. |
| Keywords: | social pressure, layoffs, adjustment costs, selfishness, firm visibility, distance to headquarters |
| JEL: | J23 J63 M51 R12 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8910&r=eur |
| By: | Isabel Busom (Departament d’Economia Aplicada, Universitat Autonama de Barcelona); Beatriz Corchuelo (Universidad de Extremadura, Departamento de Economía); Ester Martínez-Ros (Universidad Carlos III de Madrid, Departamento de Economía de la Empresa) |
| Abstract: | We provide comparative evidence on R&D tax credit and subsidy programs by studying whether firms' participation in each program exhibits state dependence and whether cross program interactions exist and are significant. We use a panel of manufacturing Spanish firms, which could use both types of support, to estimate a random effects bivariate dynamic probit model of program participation. We find that true state dependence of participation in R&D subsidy and tax credit programs accounts respectively for about 55% and 60% of observed persistence. In contrast, we do not find evidence of cross program interaction, suggesting that each tool is used by firms with different profiles. Digging on the role of some observable variables, we find that both programs reach on average stable R&D performers, and that they do not foster participation of young firms relative to older ones. We also identify significant differences across programs: while diversified and commercially successful firms are more likely to use tax incentives, those with high productivity are more likely to obtain subsidies. We discuss some policy implications of these findings |
| Keywords: | R&D, innovation policy, tax incentives, subsidies, persistence, dynamic random effects, bivariate probit |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:uab:wprdea:wpdea1503&r=eur |
| By: | Emanuela Ghignoni |
| Abstract: | The Italian university system has long been characterized by high non-completion rates, though aggregate data show a slight reduction of dropouts in recent years. The most straightforward theoretical explanation for this lies in the lowering opportunity cost of studying due to the financial and economic crisis. Nonetheless, this interpretation is likely to be partly misleading. Indeed, when the crisis hit Italy, enrolment rates had been declining for years and the sample of freshmen has become increasingly selected according to family ‘social class’. Since a good family background significantly increases students’ probability of succeeding, the recent decline in dropouts could partly depend on sample selection. By applying probit selection models and decomposition techniques to a sample of Italian university students enrolled in different periods of time, I find that the change in students’ background characteristics plays a major role in the recent reduction of the dropout rate. |
| Keywords: | dropout, enrolment, selection, social class |
| JEL: | I21 I24 E32 |
| URL: | http://d.repec.org/n?u=RePEc:sap:wpaper:wp169&r=eur |
| By: | Blázquez Cuesta, Maite (Universidad Autónoma de Madrid); Budría, Santiago (University of Madeira) |
| Abstract: | This paper uses data from the 2002-2005-2008 waves of the Spanish Survey of Household Finances (EFF) to investigate whether debts burdens hamper people's health. Several measures of debt strain are constructed, including debt-to-income ratios, the existence of debt arrears and amounts of outstanding debts. The paper also differentiates between mortgage and non-mortgage debts and explores the role of social norm effects in the debt-health relationship. The results, based on a random effects model extended to include a Mundlak term, show that non-mortgage debt payments and debt arrears affect significantly people's health. Furthermore, mild social norm effects are detected, according to which being less indebted than the reference group results, ceteris paribus, in better health. |
| Keywords: | over-indebtedness, self-assessed health, random effects model, social norm effects |
| JEL: | G01 I13 I22 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8912&r=eur |
| By: | Hanousek, Jan; Kocenda, Evzen; Shamshur, Anastasiya |
| Abstract: | Using a stochastic frontier model and a comprehensive dataset, we study factors that affect corporate efficiency in Europe. We find that (i) larger firms are less efficient than smaller firms, (ii) greater leverage contributes to corporate efficiency, and (iii) high competition is less conductive to efficiency than moderate or low competition. In terms of ownership, we find that (iv) efficiency increases when a majority owner must deal with minority shareholders and that (v) domestic majority owners improve efficiency more than foreign majority owners when no minority shareholders are present, but (vi) the opposite is true when minority shareholders hold a substantial fraction of the firm’s equity. In the analysis, we distinguish between a pre-crisis period (2001–2008) and a post-crisis period (2009-2011), and find that our results are sensitive to the period of observation. |
| Keywords: | efficiency; Europe; firms; ownership structure; panel data; stochastic frontier |
| JEL: | C33 D24 G32 L60 L80 M21 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10500&r=eur |
| By: | Hanousek, Jan; Kochanova, Anna |
| Abstract: | We examine the relation between bureaucratic corruption and firm performance in CEE countries. While previous research uses data from BEEPS, which suffers from excessive non-reporting of corporate performance, we combine reliable firm financials from the Amadeus database with information on bribery practices from BEEPS. We show that differing consequences of corruption found in previous studies could be explained by the corruption environment in which a firm operates. Basically, higher mean bribery is associated with lower performance, while higher dispersion of individual firm bribes appears to facilitate firm performance. A detailed analysis is conducted by firm sector and size, and countries’ institutional environments. |
| Keywords: | bureaucratic corruption; CEE countries; firm bribing behavior; firm performance |
| JEL: | D22 D73 O12 P37 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10499&r=eur |
| By: | González-Val, Rafael; Marcén, Miriam |
| Abstract: | In this paper, we examine the role of the business cycle in divorce. To do so, we use a panel of 30 European countries covering the period from 1991 to 2010. We find a negative effect of the unemployment rate on the divorce rate, pointing to a pro-cyclical evolution of the divorce rate, even after controlling for socio-economic variables and unobservable characteristics that can vary by country, and/or over time. Results indicate that a one-percentage-point increase in the unemployment rate involves almost 0.02 fewer divorces per thousand inhabitants. The impact is small but significant, representing around 1% of the average divorce rate in Europe during the period considered. Supplementary analysis, developed to explore a possible non-parametric pattern, confirms a clearly negative relationship between unemployment and divorce in European countries, with the inverse relationship being more pronounced when the unemployment rate is greater than 15%. |
| Keywords: | Divorce, unemployment, business cycle |
| JEL: | C14 C23 J12 |
| Date: | 2015–03–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:63194&r=eur |
| By: | Synøve N. Andersen; Nina Drange; Trude Lappegård (Statistics Norway) |
| Abstract: | This paper assesses the relationship between cash transfers to families and subsequent childbearing. We take advantage of a cash-for-care (CFC) policy introduced in Norway in 1998, and compare the fertility behaviour of eligible and ineligible mothers over a four year period. Contrary to theoretical expectations, the results show that CFC eligible mothers had a slower progression to both second and third births, and short term fertility is hence lower in this group. The patterns differ somewhat between different groups of mothers, and there seems to be a polarisation between nonemployed mothers and mothers without upper secondary education, on one hand, and employed mothers and mothers with upper secondary and higher education, on the other. We suggest that this pattern may be driven by an interaction between the CFC benefit and the Norwegian parental leave scheme. |
| Keywords: | Fertility; Family policy; Cash for care |
| JEL: | J10 J13 J18 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:800&r=eur |
| By: | Antonio Acconcia (Università di Napoli Federico II and CSEF); Giancarlo Corsetti (Cambridge University and CEPR.); Saverio Simonelli (University of Naples "Federico II" and CSEF) |
| Abstract: | Exploiting three earthquakes in Italy as quasi-experiments, we analyze the response of homeowners’ consumption to transfers targeted to finance housing repair and reconstruction. To the extent that funds are made available up-front, these transfers are akin to loans, mainly affecting the liquidity of households’ wealth. We show that these transfers have little effect over a multi-year horizon—they are not a windfall. Yet, access to reconstruction transfers has a strong and significant effect on non-durable consumption on impact, especially for households with a low level of liquid wealth and bank debt. In contrast, we find no significant consumption change in response to the in-kind equivalent of cash transfers. Our study contributes to the recent literature on the dynamics of the consumption demand by the wealthy handto- mouth, providing micro-evidence in line with the main predictions of the theory. |
| Keywords: | Consumption, Liquidity, Fiscal transfer, Quasi-experiment |
| JEL: | E21 E62 |
| Date: | 2015–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:396&r=eur |
| By: | Elert, Niklas (Research Institute of Industrial Economics (IFN)); Andersson, Fredrik (Statistics Sweden); Wennberg, Karl (Stockholm School of Economics) |
| Abstract: | This paper studies the long-term impact of entrepreneurship education and training in high school on entrepreneurial entry, performance, and survival. Using propensity score matching, we compare three Swedish cohorts from Junior Achievement Company Program (JACP) alumni with a matched sample of similar individuals and follow these for up to 16 years after graduation. We find that while JACP participation increases the long-term probability of starting a firm as well as entrepreneurial incomes, there is no effect on firm survival. |
| Keywords: | Entrepreneurship Education; Quasi-experiment; Performance |
| JEL: | D22 L25 L26 |
| Date: | 2015–03–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1063&r=eur |
| By: | Juha Kilponen, Massimiliano Pisani, Sebastian Schmidt, Vesna Corbo, Tibor Hledik, Josef Hollmayr, Samuel Hurtado, Paulo Júlio, Dmitry Kulikov, Matthieu Lemoine, Matija Lozej, Henrik Lundvall, José R. Maria, Brian Micallef, Dimitris Papageorgiou, Jakub Rysanek, Dimitrios Sideris, Carlos Thomas and Gregory de Walque (Research Department, NBB) |
| Abstract: | This paper employs fifteen dynamic macroeconomic models maintained within the European System of Central Banks to assess the size of fiscal multipliers in European countries. Using a set of common simulations, we consider transitory and permanent shocks to government expenditures and different taxes. We investigate how the baseline multipliers change when monetary policy is transitorily constrained by the zero nominal interest rate bound, certain crisis-related structural features of the economy such as the share of liquidity-constrained households change, and the endogenous fiscal rule that ensures fiscal sustainability in the long run is specified in terms of labour income taxes instead of lump-sum taxes. |
| Keywords: | Fiscal policy, Output multipliers, Model comparison, Zero lower bound |
| JEL: | E12 E13 E17 E62 E63 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbb:reswpp:201503-278&r=eur |