Universitat Autònoma de Barcelona
We study fiscal policy coordination and fiscal policy spillovers in Germany, France, Spain and Italy using a Time-Varying Coefficients VAR model for the period 1995-2014. While the four country-specific cycles share large commonalities, fiscal policy coordination across countries, measured as the time-varying correlation between government spending growth, is very low. Country-specific government spending shocks generate significant effects on the remaining countries. International spillovers are especially strong in the medium run and during the financial crisis. Also, we find heterogeneous and asymmetric response to spending across countries.
The ADEMU Working Paper Series is being supported by the European Commission Horizon 2020 European Union funding for Research & Innovation, grant agreement No 649396.
Working paper
English
Fiscal spillovers; Government spending shock; Time-tarying toefficients VAR; Euro Area
European Commission 649396
Barcelona Graduate School of Economics. ADEMU working paper series ;
open access
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