Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/232604
Authors: 
Bertsch, Christoph
Hull, Isaiah
Zhang, Xin
Year of Publication: 
2021
Series/Report no.: 
Sveriges Riksbank Working Paper Series No. 401
Abstract: 
Using a novel rich dataset at the regional level, this paper provides new empirical evidence on the €fiscal transmission mechanism in the Eurozone. Our baseline estimates reveal a government spending relative output multiplier of 2.9, an employment multiplier of 1.9, and a cost per job created of €24,000. Moreover, we €find that a regional €fiscal stimulus leads to a signi€ficant increase in private investment, productivity, durable consumption, and real wages together with a signi€ficant rise in total hours worked driven by changes in the extensive margin (total employment), whereas the intensive margin (hours per worker) barely reacts. We estimate only small regional €fiscal spillovers but detect notable state dependencies. Regional fi€scal multipliers are larger in economic recessions, during €fiscal consolidations, and in the core countries of the Eurozone.
Subjects: 
Natural Language Processing
Machine Learning
Narrative Economics
JEL: 
C63
D84
E32
E7
Document Type: 
Working Paper

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