2012
DOI: 10.1016/j.econmod.2011.10.001
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FiMod — A DSGE model for fiscal policy simulations

Abstract: Abstract:This paper develops a medium-scale dynamic, stochastic, general equilibrium (DSGE) model for fiscal policy simulations. Relative to existing models of this type, our model incorporates a two-country monetary union structure, which makes it well suited to simulate fiscal measures by relatively large countries in a currency area. We also provide a notable degree of disaggregation on the government expenditures side, by explicitly distinguishing between (productivity-enhancing) public investment, public … Show more

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Cited by 109 publications
(146 citation statements)
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References 42 publications
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“…While the literature disagrees on the size and even the sign of fiscal multipliers, they are closer to an agreement that factors such as leakages into saving and imports ( Ilzetzki et al, 2013 ) and the response of monetary policy to fiscal actions ( Spilimbergo et al, 2009 ) matter. Smaller economies that are more open to trade and countries in which monetary policy offsets the fiscal stimulus will tend to have lower multipliers.…”
Section: Introductionmentioning
confidence: 89%
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“…While the literature disagrees on the size and even the sign of fiscal multipliers, they are closer to an agreement that factors such as leakages into saving and imports ( Ilzetzki et al, 2013 ) and the response of monetary policy to fiscal actions ( Spilimbergo et al, 2009 ) matter. Smaller economies that are more open to trade and countries in which monetary policy offsets the fiscal stimulus will tend to have lower multipliers.…”
Section: Introductionmentioning
confidence: 89%
“…37 This has often been used to strengthen the case for greater infrastructur al spending. In the case of Ireland, ( Morgenroth, 2011 ) states explicitly that there are positive effects of government infrastructur al investment if additional infrastructure benefits the private sector. However, he also notes that government investment can have no or even negative effects if the additional infrastructure is not needed.…”
Section: Government Expenditure Reorientationmentioning
confidence: 98%
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“…Maximising subject to equations and yields standard first‐order conditions for optimising households. These plus the corresponding marginal utility of consumption for RoT households are analogous to those in Stähler and Thomas (). The (modified) first‐order conditions relevant for the households’ investment decisions are the consumption Euler equations determining government bond and international asset holdings as well as the equations for optimal capital investment, given by λto=βEtλt+1oRtetpt+1τt+1italicwealthπt+1,λto1+ψdDtiPttrueD¯itrueP¯=βEtλt+1oRtecbetpt+1τt+1italicwealthπt+1and truerightQt=leftβEt{λt+1oλto()1δkQt+1+()1τt+1krt+1kleft}0ptλt+1oλto+τt+1kδket…”
Section: Using Fimod To Evaluate a One‐off Wealth Levymentioning
confidence: 99%
“…The following is a non‐exhaustive list of fiscal policy issues that can be cited as examples: the effectiveness of fiscal stimulus programmes (see inter alia Almeida et al ., ; Coenen et al ., , ; Hebous, ), a cost‐benefit analysis of various consolidation measures (see inter alia Freedman et al ., ; Stähler and Thomas, ) and an evaluation of structural changes to tax legislation (see inter alia Coenen et al ., ).…”
mentioning
confidence: 99%