QUEST III: An estimated open-economy DSGE model of the euro area with fiscal and monetary policy

Ratto, Marco; Roeger, Werner; Veld, Jan in ’t

doi:10.1016/j.econmod.2008.06.014

Cited by 256 publications

(204 citation statements)

References 15 publications

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“…Ratto et al (2009) estimate that 35 % of households in the euro area are liquidityconstrained in this manner. 9 Figure 1 reports the increase in government expenditures (bar chart) together with the resulting effect on euro area real GDP in each of the three models.…”

Section: Euro Area Fiscal Stimulus Packages For 2009 and 2010mentioning

confidence: 99%

“…The models considered in this comparison are due to Smets and Wouters (2003), Laxton and Pesenti (2003), Ratto et al (2009), Taylor (1993 and Fagan et al (2005). 5 All five models exhibit Keynesian features such as sluggish adjustment due to price and wage rigidities.…”

Section: Ecb Working Paper Series No 1267mentioning

confidence: 99%

“…The main focus is on model simulations of the planned increase in government spending rather than increases in transfers and tax rebates, because spending is supposed to exhibit the largest Keynesian multiplier effect. The models considered in this comparison are due to Smets and Wouters (2003), Laxton and Pesenti (2003), Ratto, Roeger, and in't Veld (2009), Taylor (1993) and Fagan, Henry, and Mestre (2005). They exhibit Keynesian features such as price and wage rigidities and were estimated to fit euro area data.…”

Section: Non-technical Summarymentioning

confidence: 99%

“…These models account for forward-looking decisions by households and firms that anticipate future changes in government policies. The models of Smets and Wouters (2003), Laxton and Pesenti (2003) and Ratto et al (2009) also belong to the class of models often referred to as New-Keynesian dynamic stochastic general equilibrium (DSGE) models. Such models fully incorporate recent advances in terms of microeconomic foundations from real-business-cycle models and combine them with Keynesian-style rigidities.…”

Section: Ecb Working Paper Series No 1267mentioning

confidence: 99%

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Keynesian government spending multipliers and spillovers in the euro area

2011

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Section: Euro Area Fiscal Stimulus Packages For 2009 and 2010mentioning

confidence: 99%

Section: Ecb Working Paper Series No 1267mentioning

confidence: 99%

Section: Non-technical Summarymentioning

confidence: 99%

Section: Ecb Working Paper Series No 1267mentioning

confidence: 99%

See 2 more Smart Citations

Keynesian government spending multipliers and spillovers in the euro area

2011

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“…QUEST III for the EU (Ratto et al, 2009), SIGMA for the US (Erceg et al, 2006), the BEQM for the UK (Harrison et al, 2005), the TOTEM for Canada (Murchison et al, 2004), AINO for Finland (Kilponen et al, 2004), or the models devised by Smets and Wouters (2003) for EMU, Lindé et al (2004) for Sweden and Cadiou et al (2001) for 14 OECD countries. Two models of the Spanish economy different to REMS are BEMOD and MEDEA, respectively developed by Andrés et al (2006) and Burriel et al (2010).…”

Section: Many Central Banks and International Institutions Have Elabomentioning

confidence: 99%

Fiscal Devaluations in EMU

Mares¹,

Vilariño²

2013

HPE-RPE

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SummaryWe use a small open economy general equilibrium model to analyse the effects of a fiscal devaluation in an EMU country. The model has been calibrated for the Spanish economy, which is a good example of the advantages of a change in the tax mix given that its tax system shows a positive bias in the ratio of social security contributions over consumption taxes. The preliminary empirical evidence for European countries shows that this bias was negatively correlated with the current account balance in the expansionary years leading up to the 2009 crisis, a period when many EMU members accumulated large external imbalances. Our simulation results point to significant positive effects of a fiscal devaluation on GDP and employment similar to the ones that could be obtained with an exchange rate devaluation. However, although the effects in terms of GDP and employment are similar, the composition effects of fiscal and nominal devaluations are not alike. In both cases, there is an improvement in net exports, but the effects on domestic and external demand are quite different.

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When Does Government Debt Crowd Out Investment?

Traum

Yang

2015

J. Appl. Econ.

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Summary We examine when government debt crowds out investment for the US economy using an estimated New Keynesian model with detailed fiscal specifications and accounting for monetary and fiscal policy interactions. Whether investment is crowded in or out in the short term depends on policy shocks triggering debt expansions: higher debt can crowd in investment for cutting capital tax rates or increasing government investment. Contrary to the conventional view, no systematic relationships between real interest rates and investment exist, explaining why reduced‐form regressions are inconclusive about crowding out. At longer horizons, distortionary financing is important for the negative investment response to debt. Copyright © 2013 John Wiley & Sons, Ltd.

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QUEST III: An estimated open-economy DSGE model of the euro area with fiscal and monetary policy

Cited by 256 publications

References 15 publications

Keynesian government spending multipliers and spillovers in the euro area

Keynesian government spending multipliers and spillovers in the euro area

Fiscal Devaluations in EMU

When Does Government Debt Crowd Out Investment?

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