Interactions between fiscal multipliers and sovereign risk premium during fiscal consolidation: model based assessment for the euro area

Magdalena Lalik

No 2016, Working Paper Series from European Central Bank

Abstract: The paper presents a model-based assessment of fiscal multipliers operating in the euro area during the period 2011-2014. The assessment is conditional on two distinct reactions of the sovereign risk premium (either responding endogenously to fiscal shocks or being an exogenous process) and two types of monetary policy (accommodative and non-accommodative). Applying those multipliers to the amount of austerity measures implemented in years 2011-14, the paper evaluates their possible fallouts and shows that the output effects of the recent fiscal consolidations were largely determined by two key factors: financial markets JEL Classification: E42, E32, F42, F45

Keywords: debt dynamics; euro area; Fiscal multiplier; macroeconomic models; sovereign risk premium (search for similar items in EconPapers)
Date: 2017-02
New Economics Papers: this item is included in nep-eec, nep-fdg and nep-mac
Note: 1420525
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.ecb.europa.eu//pub/pdf/scpwps/ecbwp2016.en.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20172016

Access Statistics for this paper

More papers in Working Paper Series from European Central Bank 60640 Frankfurt am Main, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Official Publications ().