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Titel
The effects of fiscal policy in an estimated DSGE model : the case of the German stimulus packages during the great recession / Andrej Drygalla, Oliver Holtemöller, Konstantin Kiesel
VerfasserDrygalla, Andrej ; Holtemöller, Oliver ; Kiesel, Konstantin
ErschienenHalle (Saale), Germany : Halle Institute for Economic Research (IWH) - Member of the Leibniz Association, [02. Januar 2018]
Umfang1 Online-Ressource (46 Seiten, 0,89 MB) : Diagramme
SpracheEnglisch
SerieIWH-Diskussionspapiere ; 2017, no. 34 (December 2017)
URNurn:nbn:de:gbv:3:2-87032 
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The effects of fiscal policy in an estimated DSGE model [0.89 mb]
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In this paper we analyse the effects of the stimulus packages adopted by the German government during the Great Recession. We employ a standard mediumscale dynamic stochastic general equilibrium (DSGE) model extended by nonoptimising households and a detailed fiscal sector. In particular the dynamics of spending and revenue variables are modeled as feedback rules with respect to the cyclical component of output. Based on the estimated rules fiscal shocks are identified. According to the results fiscal policy in particular public consumption investment transfers and changes in labour tax rates including social security contributions prevented a sharper and prolonged decline of German output at the beginning of the Great Recession suggesting a timely response of fiscal policy. The overall effects however are small when compared to other domestic and international shocks that contributed to the economic downturn. Our overall findings are not sensitive to the allowance of fiscal foresight.