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Author (up) Coenen, Günter; Straub, R.; Trabandt, M. url  openurl
  Title Gauging the effects of fiscal stimulus packages in the euro area Type Report
  Year 2012 Publication Abbreviated Journal  
  Volume Issue 1483 Pages  
  Keywords Fiscal policy; fiscal multiplier; European Economic Recovery Plan; DSGE modelling; Bayesian inferenc  
  Abstract We seek to quantify the impact on euro area GDP of the European Economic Recovery Plan (EERP) enacted in response to the financial crisis of 2008-09. To do so, we estimate an extended version of the ECB's New Area-Wide Model with a richly specified fiscal sector. The estimation results point to the existence of important complementarities between private and government consumption and, to a lesser extent, between private and public capital. We first examine the implied present-value multipliers for seven distinct fiscal instruments and show that the estimated complementarities result in fiscal multipliers larger than one for government consumption and investment. We highlight the importance of monetary accommodation for these findings. We then show that the EERP, if implemented as initially enacted, had a sizeable, although short-lived impact on euro area GDP. Since the EERP comprised both revenue and expenditurebased fiscal stimulus measures, the total multiplier is below unity. JEL Classification: C11, E32, E62  
  Address  
  Corporate Author Thesis  
  Publisher European Central Bank Place of Publication Editor  
  Language Summary Language Original Title  
  Series Editor Series Title Abbreviated Series Title  
  Series Volume Series Issue Edition  
  ISSN ISBN Medium  
  Area Expedition Conference  
  Notes Approved no  
  Call Number CEPREMAP @ michel.juillard @ RePEc:ecb:ecbwps:20121483 Serial 1111  
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