1,720,972 research outputs found
Public debt determinants: A time-varying analysis of core and peripheral Euro area countries
No full textThe Government Spending Multiplier at the Zero Lower Bound: Evidence from the Euro Area
No full textWe use an Interacted Panel Vector Autoregressive (IPVAR) model,
to investigate the effects of a government spending shock when
the interest rate is at zero lower bound (ZLB). We also compare the
responses of variables of interest at the ZLB with what we get when a
government spending shock occurs in normal times (i.e. when the interest
rate is larger than 0.25). We identify the government spending
shock by sign restrictions and use the European Commission forecasts of government expenditure to account for fiscal foresight. For the baseline
specification we find lower multipliers in times in which the ZLB
is binding. However, fiscal foresight is not the only problem in fiscal
VARs related to limited information problems. Usually, VAR models
can only consider a limited number of variables due to degree of freedom
problems. Several authors have shown (see Stock and Watson
(2005) for a survey) how principal components extracted from a larger
number of variables, can approximate unobserved factors driving
most (if not all) of the macroeconomic variables. Therefore, we develop
a Factor-Augmented IPVAR model (FAIPVAR) and find that the
multipliers are very similar among states, ranging between 1.08 and
1.41 at the ZLB and between 1.26 and 1.39 away from it. We also divide
our sample, considering two groups of countries in terms of high
and low debt-to-GDP ratios. We find that countries with high levels of
debt-to-GDP ratio show relatively lower multipliers. Considering the
FAIPVAR model, the government spending multiplier ranges between
2.69 and 3.54 for core countries and between 0.82 and 1.37 for peripheral
countries. Therefore, our findings support some recent studies,
which suggest that the government spending multiplier is even larger
if the debt-to-GDP ratio is low
The Government Spending Multiplier at the Zero Lower Bound: Evidence from the United States
Full text linkWe estimate state‐dependent government spending multipliers for the United States. We use a factor‐augmented interacted vector autoregression (FAIVAR) model. This allows us to capture the time‐varying monetary policy characteristics including the recent zero interest rate lower bound (ZLB) state, to account for the state of the business cycle and to address the limited information problem typically inherent in VARs. We identify government spending shocks by sign restrictions and use a government spending growth forecast series to account for the effects of anticipated fiscal policy. In our baseline specification, we find that government spending multipliers in a recession range from 3.56 to 3.79 at the ZLB. Away from the ZLB, multipliers in recessions range from 2.31 to 3.05. Several robustness analyses confirm that multipliers are higher, when the interest rate is lower and that multipliers in recessions exceed multipliers in expansions. Our results are consistent with theories that predict larger multipliers at the ZLB
The Euro Area Government Spending Multiplier in Demand‐ and Supply‐Driven Recessions
No full textWe estimate government spending multipliers in demand- and supply-driven recessions for the Euro Area. Multipliers in a moderately demand-driven recession are two to three times larger than in a moderately supply-driven recession, with the difference between multipliers being non-zero with very high probability. More generally, multipliers are inversely correlated with the deviation of inflation from its trend, implying that the more demand-driven a recession, the higher the multiplier. Multipliers range from −0.5 in supply-driven recessions to about 2 in demand-driven recessions. The econometric approach leverages a factor-augmented interacted vector-autoregression model purified of expectations (FAIPVAR-X). The model captures the time-varying state of the business-cycle including strongly and moderately demand- and supply-driven recessions, by taking the whole distribution of inflation deviations from trend into accoun
Going Beyond Counting First Authors in Author Co-citation Analysis
Full text linkThe present study examines one of the fundamental aspects of author co-citation analysis (ACA) - the way co-citation
counts are defined. Co-citation counting provides the data on which all subsequent statistical analyses and mappings
are based, and we compare ACA results based on two different types of co-citation counting - the traditional type that
only counts the first one among a cited work's authors on the one hand and a non-traditional type that takes into
account the first 5 authors of a cited work on the other hand. Results indicate that the picture produced through this non-traditional author co-citation counting contains more coherent author groups and is therefore considerably clearer. However, this picture represents fewer specialties in the research field being studied than that produced through the traditional first-author co-citation counting when the same number of top-ranked authors is selected and analyzed. Reasons for these effects are discussed
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