Fiscal Devaluation in a Monetary Union /

Using a DSGE model calibrated to the euro area, we analyze the international effects of a fiscal devaluation (FD) implemented as a revenue-neutral shift from employer's social contributions to the Value Added Tax. We find that a FD in 'Southern European countries' has a strong positiv...

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Bibliografske podrobnosti
Glavni avtor: Engler, Philipp
Drugi avtorji: Ganelli, Giovanni, Tervala, Juha, Voigts, Simon
Format: Revija
Jezik:English
Izdano: Washington, D.C. : International Monetary Fund, 2014.
Serija:IMF Working Papers; Working Paper ; No. 2014/201
Online dostop:Full text available on IMF
Opis
Izvleček:Using a DSGE model calibrated to the euro area, we analyze the international effects of a fiscal devaluation (FD) implemented as a revenue-neutral shift from employer's social contributions to the Value Added Tax. We find that a FD in 'Southern European countries' has a strong positive effect on output, but mild effects on the trade balance and the real exchange rate. Since the benefits of a FD are small relative to the divergence in competitiveness, it is best addressed through structural reforms.
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Fizični opis:1 online resource (33 pages)
Format:Mode of access: Internet
ISSN:1018-5941
Dostop:Electronic access restricted to authorized BRAC University faculty, staff and students