dc.contributor.author
Fève, Patrick
dc.contributor.author
Sahuc, Jean-Guillaume
dc.identifier
https://ddd.uab.cat/record/196717
dc.identifier
urn:oai:ddd.uab.cat:196717
dc.description.abstract
This paper applies the DSGE-VAR methodology to assess the size of fiscal multipliers in the data and the relative contributions of two transmission mechanisms of government spending shocks, namely hand-to-mouth consumers and Edgeworth complementarity. Econometric experiments show that a DSGE model with Edgeworth complementarity is a better representation of the transmission mechanism of fiscal policy as it yields dynamic responses close to those obtained with the flexible DSGE-VAR model (i.e. an impact output multiplier larger than one and a crowding-in of private consumption). The estimated share of hand-to-mouth consumers is too small to replicate the positive response of private consumption.
dc.description.abstract
The ADEMU Working Paper Series is being supported by the European Commission Horizon 2020 European Union funding for Research & Innovation, grant agreement No 649396.
dc.format
application/pdf
dc.relation
European Commission 649396
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Barcelona Graduate School of Economics. ADEMU working paper series ;
dc.rights
Aquest document està subjecte a una llicència d'ús Creative Commons. Es permet la reproducció total o parcial, la distribució, la comunicació pública de l'obra i la creació d'obres derivades, fins i tot amb finalitats comercials, sempre i quan es reconegui l'autoria de l'obra original.
dc.rights
https://creativecommons.org/licenses/by/4.0/
dc.subject
Fiscal multipliers
dc.subject
Edgeworth complementarity
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Bayesian econometrics
dc.title
In search of the transmission mechanism of fiscal policy in the euro area
