Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/203609
Authors: 
Ettmeier, Stephanie
Kriwoluzky, Alexander
Year of Publication: 
2019
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2019: 30 Jahre Mauerfall - Demokratie und Marktwirtschaft - Session: Applied Macroeconometrics I No. A13-V3
Abstract: 
We revisit the question whether U.S. fiscal policy in the pre-Volcker period was active or passive. To determine the policy stance, we estimate a DSGE model with monetary and fiscal policy interactions employing a sequential Monte Carlo algorithm (SMC) for posterior evaluation. In contrast to previous studies, we do not have to treat the different policy regimes as distinct models, which have to be estimated separately. Instead, the SMC enables us to estimate the DSGE model over its entire parameter space to determine the prevailing policy mix. Our findings attribute the leading role to the fiscal authority, while the monetary authority accommodated its actions. For active monetary/passive fiscal policy, or passive monetary/passive fiscal policy we find no evidence in the data.
Subjects: 
Bayesian Analysis
DSGE Models
Monetary-Fiscal Policy Interactions
Monte Carlo Methods
JEL: 
C11
C15
E63
E65
Document Type: 
Conference Paper

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