Increase the visibility of your scientific production by authorizing the export of your publications to HAL!

In search of the transmission mechanism of fiscal policy in the Euro area

Fève, Patrick and Sahuc, Jean-Guillaume (2014) In search of the transmission mechanism of fiscal policy in the Euro area. TSE Working Paper, n. 14-536, Toulouse

WarningThere is a more recent version of this item available.
Download (500kB) | Preview
Official URL:


This paper applies the DSGE-VAR methodology to assess the size of fiscal multipliers in the data and the relative contributions of two transmission mechanisms of government spending shocks, namely hand-to-mouth consumers and Edgeworth complementarity. Econometric experiments show that a DSGE model with Edgeworth complementarity is a better representation of the transmission mechanism of fiscal policy as it yields dynamic responses close to those obtained with the flexible DSGE-VAR model (i.e. an impact output multiplier larger than one and a crowding-in of private consumption). The estimated share of hand-to-mouth consumers is too small to replicate the positive response of private consumption.

Item Type: Monograph (Working Paper)
Language: English
Date: 7 November 2014
Place of Publication: Toulouse
Uncontrolled Keywords: Fiscal multipliers, hand-to-mouth, Edgeworth complementarity, DSGE-VAR, Euro area, Bayesian econometrics
JEL Classification: C32 - Time-Series Models
E32 - Business Fluctuations; Cycles
E62 - Fiscal Policy; Public Expenditures, Investment, and Finance; Taxation
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 16 Mar 2015 14:51
Last Modified: 07 Mar 2018 13:23
["eprint_fieldname_oai_identifier" not defined]:

Available Versions of this Item

Actions (login required)

View Item View Item


Downloads per month over past year