Fiscal policy and the 'Great Recession' in the euro area

Roland Straub, Günter Coenen and Mathias Trabandt

No 1429, Working Paper Series from European Central Bank

Abstract: How much did fiscal policy contribute to euro area real GDP growth during the Great Recession? We estimate that discretionary fiscal measures have increased annualized quarterly real GDP growth during the crisis by up to 1.6 percentage points. We obtain our result by using an extended version of the European Central Bank’s New Area-Wide Model with a rich specification of the fiscal sector. A detailed modeling of the fiscal sector and the incorporation of as many as eight fiscal time series appear pivotal for our result. JEL Classification: C11, E32, E62

Keywords: Bayesian inference; DSGE modelling; euro area (search for similar items in EconPapers)
Date: 2012-03
New Economics Papers: this item is included in nep-dge and nep-mac
Note: 1065946
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Citations: View citations in EconPapers (136)

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Related works:
Journal Article: Fiscal Policy and the Great Recession in the Euro Area (2012)
Working Paper: Fiscal policy and the Great Recession in the euro area (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20121429

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