IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v89y2024ipap1422-1441.html
   My bibliography  Save this article

A database: How the euro crisis ended: Not with a (fiscal) bang but a whimper

Author

Listed:
  • Köhler, Ekkehard A.
  • Hirsch, Patrick
  • Palhuca, Leonardo

Abstract

A reform of the fiscal framework in the European Union is currently under discussion. The way ahead is yet unclear. In revisiting the importance of monetary and fiscal policy coordination to reduce uncertainty during the Eurozone Crisis, we add to this discussion a database that comprises daily official data on every policy action from 2007 to 2016 taken by the European Central Bank, the European Commission, and other governmental actors as a free download. Then, we investigate the effect of fiscal policy in an event-study analysis. We find that most measures designed to strengthen the existing Maastricht 1.0 framework of the European Monetary Union (e.g., fiscal compact) are not correlated with yield spreads reduction and do not have any causal effect on uncertainty. Events signaling out financial stability and financial assistance among European Monetary Union member states are likely to have that effect in comparison. After Germany's Bundestag ratified the European Stability Mechanism and when the Federal Constitutional Court approved its legitimacy, yield spreads of Greece, Ireland, Italy, Portugal and Spain significantly decreased.

Suggested Citation

  • Köhler, Ekkehard A. & Hirsch, Patrick & Palhuca, Leonardo, 2024. "A database: How the euro crisis ended: Not with a (fiscal) bang but a whimper," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 1422-1441.
    • Handle: RePEc:eee:reveco:v:89:y:2024:i:pa:p:1422-1441
    DOI: 10.1016/j.iref.2023.07.050
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056023002617
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iref.2023.07.050?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Patrick Hirsch & Lars P. Feld & Ekkehard A. Köhler & Tobias Thomas, 2024. "“Whatever It Takes!” How Tonality of TV-News Affected Government Bond Yield Spreads during the European Debt Crisis," CESifo Working Paper Series 10980, CESifo.

    More about this item

    Keywords

    (Un-)conventional fiscal policy; Event study; GARCH;
    All these keywords.

    JEL classification:

    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:89:y:2024:i:pa:p:1422-1441. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620165 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.