Assessing the Impact of a Change in the Composition of Public Spending: A DSGE Approach
Despite intense calls for safeguarding public investment in Europe, public investment expenditure, when measured in relation to GDP, has steadily fallen in the last three decades, evoking fears that economic activity may be correspondingly negatively affected. At the same time, however, public consu...
Gespeichert in:
| 1. Verfasser: | |
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| Format: | Elektronisch E-Book |
| Sprache: | English |
| Veröffentlicht: |
Washington, D.C
International Monetary Fund
2007
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| Schriftenreihe: | IMF Working Papers
Working Paper No. 07/168 |
| Online-Zugang: | UBW01 UEI01 LCO01 SBR01 UER01 SBG01 UBG01 FAN01 UBT01 FKE01 UBY01 UBA01 FLA01 UBM01 UPA01 UBR01 FHA01 FNU01 BSB01 TUM01 Volltext |
| Zusammenfassung: | Despite intense calls for safeguarding public investment in Europe, public investment expenditure, when measured in relation to GDP, has steadily fallen in the last three decades, evoking fears that economic activity may be correspondingly negatively affected. At the same time, however, public consumption in the EU-12 countries has trended up. In this paper, we provide a macroeconomic assessment of the observed change in the composition of public spending in the euro area in a medium-scale two-country dynamic stochastic general equilibrium (DSGE) model. First, we identify the channels through which both temporary and permanent public investment shocks generate larger fiscal multipliers than exogenous increases in public consumption. Second, we quantify the negative impact of a change in fiscal stance, characterized by a permanent rise in public consumption and a permanent fall in public investment, keeping the overall level of public spending constant. The key message of the paper is that calls for reversing the observed trend in the composition of public spending are well justified |
| Beschreibung: | 1 Online-Ressource (47 p) |
| ISBN: | 1451867328 9781451867329 |
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| index_date | 2024-07-03T20:13:23Z |
| indexdate | 2024-07-10T09:35:31Z |
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| record_format | marc |
| series2 | IMF Working Papers |
| spelling | Tchakarov, Ivan Verfasser aut Assessing the Impact of a Change in the Composition of Public Spending A DSGE Approach Tchakarov, Ivan Washington, D.C International Monetary Fund 2007 1 Online-Ressource (47 p) txt rdacontent c rdamedia cr rdacarrier IMF Working Papers Working Paper No. 07/168 Despite intense calls for safeguarding public investment in Europe, public investment expenditure, when measured in relation to GDP, has steadily fallen in the last three decades, evoking fears that economic activity may be correspondingly negatively affected. At the same time, however, public consumption in the EU-12 countries has trended up. In this paper, we provide a macroeconomic assessment of the observed change in the composition of public spending in the euro area in a medium-scale two-country dynamic stochastic general equilibrium (DSGE) model. First, we identify the channels through which both temporary and permanent public investment shocks generate larger fiscal multipliers than exogenous increases in public consumption. Second, we quantify the negative impact of a change in fiscal stance, characterized by a permanent rise in public consumption and a permanent fall in public investment, keeping the overall level of public spending constant. The key message of the paper is that calls for reversing the observed trend in the composition of public spending are well justified Online-Ausg Straub, Roland Sonstige oth http://elibrary.imf.org/view/IMF001/00446-9781451867329/00446-9781451867329/00446-9781451867329.xml Verlag URL des Erstveröffentlichers Volltext |
| spellingShingle | Tchakarov, Ivan Assessing the Impact of a Change in the Composition of Public Spending A DSGE Approach |
| title | Assessing the Impact of a Change in the Composition of Public Spending A DSGE Approach |
| title_auth | Assessing the Impact of a Change in the Composition of Public Spending A DSGE Approach |
| title_exact_search | Assessing the Impact of a Change in the Composition of Public Spending A DSGE Approach |
| title_exact_search_txtP | Assessing the Impact of a Change in the Composition of Public Spending A DSGE Approach |
| title_full | Assessing the Impact of a Change in the Composition of Public Spending A DSGE Approach Tchakarov, Ivan |
| title_fullStr | Assessing the Impact of a Change in the Composition of Public Spending A DSGE Approach Tchakarov, Ivan |
| title_full_unstemmed | Assessing the Impact of a Change in the Composition of Public Spending A DSGE Approach Tchakarov, Ivan |
| title_short | Assessing the Impact of a Change in the Composition of Public Spending |
| title_sort | assessing the impact of a change in the composition of public spending a dsge approach |
| title_sub | A DSGE Approach |
| url | http://elibrary.imf.org/view/IMF001/00446-9781451867329/00446-9781451867329/00446-9781451867329.xml |
| work_keys_str_mv | AT tchakarovivan assessingtheimpactofachangeinthecompositionofpublicspendingadsgeapproach AT straubroland assessingtheimpactofachangeinthecompositionofpublicspendingadsgeapproach |