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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/62326
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| Title: | | Estimating the effects of coordinated fiscal actions in the euro area  |
| Authors: | | Hebous, Shafik Zimmermann, Tom |
| Issue Date: | | 2012 |
| Series/Report no.: | | CESifo Working Paper: Fiscal Policy, Macroeconomics and Growth 3912 |
| Abstract: | | We estimate spillover effects of a fiscal shock in one member country in the euro area on outputs of the rest of the members, using a Global Vector Autoregression (GVAR) model. We compare the effects of a domestic fiscal shock with those of a similar size area-wide shock expressed as a weighted average of the fiscal shocks across all member countries. According to our estimates, the impact of an area-wide fiscal shock on output of a member country tends to be positive and larger than that of a domestic shock. Since the cost of participating in the area-wide shock is lower than the cost of a similar size domestic shock, our finding indicates the importance of coordinated fiscal actions in the euro area. |
| Subjects: | | fiscal policy coordination cross-border spillovers open economy macroeconomics European integration Global VAR |
| JEL: | | E62 F41 F42 F15 H50 H60 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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