IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

The estimated general equilibrium effects of fiscal policy: the case of the euro area

  • Lorenzo Forni
  • Libero Monteforte

    (Luca Sessa - Banca d'Italia, Research Department)

We reconsider the macroeconomic effects of fiscal policy in the context of a new-keynesian dynamic stochastic general equilibrium model. We assume that a fraction of the agents are non Ricardian and estimate the model parameters using Bayesian techniques. Our results show that the estimates of important parameters of the model differ depending on how detailed the fiscal policy is modelled. In particular, when we properly model distortionary taxes and take into account the fact that government expenditure is a composite aggregate (including consumption of goods and compensations for government employees), the estimated share of non Ricardian agents is significant and the model is able to replicate the widespread evidence that private consumption responds positively to government expenditure shocks. Previous papers, which mainly considered lump-sum taxes and treated government consumption as one single aggregate, obtained a smaller estimated share of non Ricardian households and no significant effect of government spending shocks on macroeconomic variables

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Paper provided by Society for Computational Economics in its series Computing in Economics and Finance 2006 with number 142.

as
in new window

Length:
Date of creation: 04 Jul 2006
Date of revision:
Handle: RePEc:sce:scecfa:142
Contact details of provider: Web page: http://comp-econ.org/
Email:


More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:sce:scecfa:142. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum)

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.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.