On the relationship between fiscal plans in the European Union: an empirical analysis based on real-time data
In: Discussion paper series 6088
In: International macroeconomics
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In: Discussion paper series 6088
In: International macroeconomics
In: Working paper series 325
In: Scottish journal of political economy: the journal of the Scottish Economic Society, Band 52, Heft 4, S. 519-543
ISSN: 1467-9485
AbstractThis paper provides a discussion of the 'housing market' channels of the monetary transmission mechanism and offers some evidence of institutional differences in the European housing and mortgage markets. Using a number of Vector Autoregressive models, estimated individually for nine European countries over the pre‐EMU period, we find that house prices are significantly affected by interest rate shocks. The relative role of these interest‐rate‐induced fluctuations in house prices for private consumption is then investigated. We show that house prices may enhance the effects of interest rate shocks on consumer spending in those economies where housing and mortgage markets are relatively more developed and competitive.
In: De Nederlandsche Bank Working Paper No. 674 (2020)
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In: Scottish journal of political economy: the journal of the Scottish Economic Society, Band 59, Heft 1, S. 28-46
ISSN: 1467-9485
AbstractWe develop a dynamic model of the interest rates of a monopolistic bank, providing both intermediation and payment services. We obtain testable restrictions on portfolio separation from the dynamic terms of the reduced‐form solutions, and test the model using balance‐sheet data from large banks of 17 OECD countries, over the period 1988–2007. We find strong evidence against the portfolio separation hypothesis. In line with the predictions of the model, interest margins rise with higher market interest rates, lower revenues from fees, and higher industrial costs and loan loss provisions.
In: The economic journal: the journal of the Royal Economic Society, Band 121, Heft 550, S. F4-F32
ISSN: 1468-0297
We briefly review the theoretical and empirical consequences of discretionary fiscal policy changes, after which we provide our own estimates for the EU countries. A fiscal expansion raises output and consumption and reduces the trade balance. Moreover, the stimulating effect of higher government purchases is weaker and the trade balance reduction is larger for more open EU economies, consistent with larger leakage effects. Further direct estimates suggest that fiscal expansions in large EU economies have non-negligible consequences for economic activity in the main trading partners. This provides a rationale for the concerted fiscal expansion recently initiated by the European Commission.
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In: Applied Economics
This paper investigates the determinants of house prices in a sample of European countries over the period 1970-2004. Focusing on the role of financial liberalization, we find that it has mainly affected the short term dynamics of residential prices. In particular, the impulse effects on house prices of income and mortgage debt have become smaller. On the other hand the effects of interest rates, past house prices and, to a lesser degree, stock market have strengthened. In other words, there seems to have been a certain "de-linking" of short term house price dynamics from income, whereas the housing market may have become more similar to a financial asset market, with interest rates and expectations of capital gains playing a more prominent role.
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In: Public choice, Band 197, Heft 1-2, S. 201-225
ISSN: 1573-7101
AbstractIt is well documented that the public is often poorly informed about the economy. In the domain of fiscal policy, this may make voters susceptible to favour spending, while underestimating its costs (fiscal illusion). While politicians may have more information to judge the need for prudent economic policies, voters may be less inclined to support prudent fiscal policy if they do not believe that these politicians act in their best interest—an idea that in recent decades has become more prevalent. Using a novel dataset from the Netherlands, this paper examines whether strong populist ideas lead to more expansionary fiscal preferences, thereby reinforcing the risk of fiscal illusion. The findings indicate that respondents' populist attitudes significantly predict their fiscal preferences. Additionally, higher literacy and information provision contribute to more prudent fiscal preferences. However, the impact of literacy is conditioned by the level of populist sentiment. Poorly literate respondents show higher support for tax relief only when holding strong populist attitudes, not when expressing lower levels of populist sentiment.
In: De Nederlandsche Bank Working Paper No. 748
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In: De Nederlandsche Bank Working Paper No. 731, November 2021
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In: De Nederlandsche Bank Working Paper No. 694
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In: ECB Working Paper No. 2148
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