Foreign fiscal policy spillovers on Austria

Davoine, Thomas (2017) Foreign fiscal policy spillovers on Austria. Wirtschaftspolitische Blätter, 2017 (2), pp. 273-284.

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Abstract or Table of Contents

The rationale for fiscal policy coordination within the European Union during normal times is weak because cross-country fiscal policy spillovers are found to be small. During crises, spillovers are larger, either because of constraints on monetary policy or because capital markets are well integrated. With a multi-country general equilibrium model assuming perfect capital market integration, I quantify the medium run impact of foreign fiscal actions on Austria. For instance, if Germany is hit by a negative shock and bails out its private sector, the predicted yearly average GDP loss in Austria is 15% of the yearly GDP loss in Germany. Bailouts in smaller European countries lead to weaker spillovers.

Item Type: Article in Academic Journal
Classification Codes (e.g. JEL): E6, F42
Research Units: European Governance and Public Finance
Status: Published
Related URLs:
Date Deposited: 01 Sep 2017 07:10
Last Modified: 11 May 2018 10:42
ISSN: 1605-8704
URI: https://irihs.ihs.ac.at/id/eprint/4334

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