- Home
- Publications
- Fiscal Policy Spillovers
Fiscal Policy Spillovers
Downloads
DP468: Fiscal Policy SpilloversRelated Themes
Macro-Economic Dynamics and PolicyTags
Paper Category Number
468
This paper uses the National Institute Global Econometric Model (NiGEM) to quantify the magnitude of fiscal spillover multipliers in each Euro Area country following a fiscal shock to one particular Euro Area country. Spillover multipliers lie between 0.01 and 0.3 per cent when the fiscal shock takes place in Germany. These estimates correlate with the degree of trade linkages between Euro Area countries and on the elasticity of imports to total final expenditure of each country. Our analysis suggests that fiscal spillovers arising from government spending measures are larger than those arising from changes in taxation. Our fiscal spillover estimates increase by 20 to 50 per cent when the proportion of liquidity constrained agents increases by 25 per cent, our proxy for a “crisis time” scenario. We find that fiscal multipliers increase and fiscal spillovers decrease when we decompose total final expenditure in our import equations to allow for varying import intensities across its components.
Related Blog Posts
Public Debt Sustainability and Fiscal Rules
Stephen Millard
Benjamin Caswell
05 Feb 2024
4 min read
Related Projects
Related News
Call for Papers: Lessons From Quantitative Easing & Quantitative Tightening
09 Feb 2024
1 min read
Related Publications
The Nature of the Inflationary Surprise in Europe and the USA
21 Mar 2024
Discussion Papers
Energy and Climate Policy in a DSGE Model of the United Kingdom
08 Mar 2024
Discussion Papers
Exploring Alternative Data Sources for Household Wealth Statistics
24 Jan 2024
Discussion Papers