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on Financial Development and Growth |
| By: | Alice Albonico; Alessia Paccagnini; Patrizio Tirelli |
| Abstract: | This paper investigates the role of fiscal policies over the aggregate EMU business cycle. Previous studies, based on the assumption of non-separability between public and private consumptions, obtain a large public consumption multiplier, a small fraction of non-Ricardian households and, consequently, a relatively small multiplier for public transfers. We provide motivations for assuming separability and, on these grounds, we estimate a relatively large share of non-Ricardian households. As a result, we obtain that both multipliers are large. We also find that, in spite of their potentially strong effects, fiscal policies were substantially muted during the EMU years. This result is confirmed even for the post 2007 period. In fact fiscal policies did not complement the monetary policy stimulus in response to the financial crisis. Further, we cannot detect any substantial aggregate effect of austerity measures. Finally, the post-2007 surge in expenditure-to-GDP ratios was apparently determined by non-policy shocks that reduced output growth. |
| Keywords: | DSGE; Limited asset market participation; Bayesian estimation; Euro area; Business cycle; Monetary policy; Fiscal policy |
| JEL: | C11 C13 C32 E21 E32 E37 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:ucn:wpaper:201612&r=fdg |
| By: | Cesa-Bianchi, Ambrogio (Bank of England); Imbs, Jean (Paris School of Economics); Saleheen, Jumana (Bank of England) |
| Abstract: | In the workhorse model of international real business cycles, financial integration exacerbates the cycle asymmetry created by country-specific supply shocks. The prediction is identical in response to purely common shocks in the same model augmented with simple country heterogeneity (eg, where depreciation rates or factor shares are different across countries). This happens because common shocks have heterogeneous consequences on the marginal products of capital across countries, which triggers international investment. In the data, filtering out common shocks requires therefore allowing for country-specific loadings. We show that finance and synchronization correlate negatively in response to such common shocks, consistent with previous findings. But finance and synchronization correlate non-negatively, almost always positively, in response to purely country-specific shocks. |
| Keywords: | Financial linkages; business cycles synchronization; contagion; common shocks; idiosyncratic shocks |
| JEL: | E32 F15 F36 G21 G28 |
| Date: | 2016–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:boe:boeewp:0612&r=fdg |
| By: | Asheim, Geir B. (Dept. of Economics, University of Oslo) |
| Abstract: | This paper explores the view that a criterion of intergenerational equity serves to make choices according to ethical intuitions on a domain of relevant technological environments. In line with this view I first calibrate different criteria of intergenerational equity in the AK model of economic growth, with a given Productivity parameter A, and then evaluate their performance by mapping the consequences of the criteria in various technological environments. The evaluation is based on the extent to which they yield social choice mappings satisfying four desirable properties. The Calvo criterion as well as sustainable discounted utilitarianism and rank-discounted utilitarianism yield sustainable growth in the AK model, the Ramsey technology and the Dasgupta-Heal-Solow-Stiglitz technology for any specifications of these technological environments. |
| Keywords: | Intergenerational; Equity; |
| JEL: | D63 D71 O41 Q01 |
| Date: | 2016–04–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2016_007&r=fdg |