openness, like Ireland and Belgium. Generally speaking one could say that spillover effects
in the model are relatively small. As would be expected, the spillovers of a demand shock in
Germany are largest in the Netherlands, Belgium and Austria, the countries for which exports
to Germany form a relatively large share of total demand. Table 10 gives the spillover effects
under an EMS regime for shocks originating in different European countries, as discussed in
the section above and shown in the country tables in the annex.
Table 9: Impact and spillover effects on GDP of German fiscal expansion
(increase in government purchases of 1% of baseline GDP in Germany, for 10 years)
|
DE |
FR |
IT |
UK |
ES |
NL |
BE |
DK |
IR |
PO |
GR |
OS |
SW |
SF |
EU1 |
|
country:_____________ |
5 | |||||||||||||
|
Interest rate targeting: | ||||||||||||||
|
Flex.rate 0.49 |
0.07 |
0.05 |
0.04 |
0.05 |
0.17 |
0.16 |
0.09 |
0.11 |
0.04 |
0.01 |
0.15 |
0.08 |
0.06 |
0.18 |
|
EMS 0.48 |
0.00 |
-0.02 |
-0.02 |
-0.03 |
0.08 |
0.09 |
0.04 |
0.03 |
-0.01 |
-0.04 |
0.14 |
0.01 |
-0.03 |
0.12 |
|
EMU 0.54 |
0.06 |
0.03 |
0.03 |
0.04 |
0.19 |
0.17 |
0.09 |
0.10 |
0.04 |
0.01 |
0.19 |
0.06 |
0.04 |
0.18 |
|
Money targeting: Flex rate 0.05 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.01 |
|
EMS 0.03 |
-0.46 |
-0.47 |
-0.43 |
-0.53 |
-0.31 |
-0.47 |
-0.33 |
-0.48 |
-0.37 |
-0.41 |
-0.24 |
-0.47 |
-0.54 |
-0.32 |
|
EMU 0.43 |
-0.06 |
-0.08 |
-0.08 |
-0.09 |
0.08 |
0.03 |
0.00 |
-0.03 |
-0.06 |
-0.09 |
0.09 |
-0.06 |
-0.09 |
0.07 |
Note: GDP percentage difference from base in first year. EMS scenario assumes German interest rates are targeted by German monetary authorities,
EMU assumes targeting by EU monetary authorities.
Table 10: Impact and spillover effects of fiscal expansion with German interest rate targeting
(increase in government purchases of 1% of baseline GDP, for 10 years)
|
DE |
FR |
IT |
UK |
ES |
NL |
BE |
DK |
IR |
PO |
GR |
OS |
SW |
SF |
EU1 5 | |
|
DE |
0.48 |
0.00 |
-0.02 |
-0.02 |
-0.03 |
0.08 |
0.09 |
0.04 |
0.03 |
-0.01 |
-0.04 |
0.14 |
0.01 |
-0.03 |
0.12 |
|
FR |
0.09 |
0.57 |
0.06 |
0.04 |
0.08 |
0.08 |
0.19 |
0.04 |
0.10 |
0.04 |
0.00 |
0.03 |
0.03 |
0.03 |
0.16 |
|
IT |
0.06 |
0.07 |
0.63 |
0.01 |
0.03 |
0.04 |
0.06 |
0.03 |
0.04 |
0.01 |
0.02 |
0.07 |
0.03 |
0.01 |
0.14 |
|
UK |
0.09 |
0.08 |
0.04 |
0.61 |
0.07 |
0.11 |
0.15 |
0.13 |
0.35 |
0.06 |
0.02 |
0.05 |
0.15 |
0.14 |
0.16 |
|
ES |
0.03 |
0.05 |
0.02 |
0.02 |
0.61 |
0.02 |
0.04 |
0.02 |
0.03 |
0.05 |
-0.01 |
0.02 |
0.03 |
0.01 |
0.07 |
|
NL |
0.04 |
0.02 |
0.00 |
0.01 |
0.01 |
0.09 |
0.06 |
0.02 |
0.03 |
0.01 |
-0.01 |
0.01 |
0.02 |
0.01 |
0.02 |
|
BE |
0.03 |
0.03 |
0.00 |
0.01 |
0.00 |
0.04 |
-0.03 |
0.01 |
0.02 |
0.00 |
-0.01 |
0.01 |
0.02 |
0.00 |
0.02 |
|
DK |
0.02 |
0.00 |
0.00 |
0.00 |
0.00 |
0.01 |
0.01 |
0.28 |
0.01 |
0.01 |
0.00 |
0.01 |
0.08 |
0.03 |
0.01 |
|
IR |
0.00 |
0.00 |
0.00 |
0.02 |
0.00 |
0.00 |
0.00 |
0.01 |
0.06 |
0.00 |
0.00 |
0.00 |
0.01 |
0.01 |
0.01 |
|
PO |
0.01 |
0.02 |
0.01 |
0.01 |
0.05 |
0.01 |
0.01 |
0.01 |
0.01 |
0.29 |
0.00 |
0.00 |
0.01 |
0.01 |
0.02 |
|
GR |
0.01 |
0.01 |
0.01 |
0.00 |
0.00 |
0.01 |
0.01 |
0.01 |
0.01 |
0.00 |
0.55 |
0.01 |
0.00 |
0.01 |
0.01 |
|
OS |
0.04 |
-0.01 |
0.00 |
-0.01 |
-0.01 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
-0.01 |
0.27 |
0.00 |
0.00 |
0.01 |
|
SW |
0.02 |
0.01 |
0.00 |
0.01 |
0.01 |
0.02 |
0.02 |
0.08 |
0.02 |
0.01 |
0.00 |
0.01 |
0.47 |
0.12 |
0.02 |
|
SF |
0.01 |
0.00 |
0.00 |
0.00 |
0.00 |
0.01 |
0.01 |
0.02 |
0.01 |
0.00 |
0.00 |
0.01 |
0.06 |
0.57 |
0.01 |
Note: The first row shows the effects of a fiscal expansion in Germany on GDP in each other country, the second row of an expansion in France, etc.
(percentage difference from base)
3HUPDQHQW ILvfdO h[SDQVLRQ xqGhu dOWhuqdWLyh Wd[ dvvxpsWLrqv
In the above scenario it was assumed that the increase in public spending is paid for by a
reduction in transfers from the government to households in the long term, which is the
standard assumption in the model. Such lump sum transfers are the least distortionary in the
model. Financing by other tax increases is considerably more distortionary. To demonstrate
28
More intriguing information
1. The name is absent2. Testing for One-Factor Models versus Stochastic Volatility Models
3. AN ANALYTICAL METHOD TO CALCULATE THE ERGODIC AND DIFFERENCE MATRICES OF THE DISCOUNTED MARKOV DECISION PROCESSES
4. The magnitude and Cyclical Behavior of Financial Market Frictions
5. Barriers and Limitations in the Development of Industrial Innovation in the Region
6. The name is absent
7. Shifting Identities and Blurring Boundaries: The Emergence of Third Space Professionals in UK Higher Education
8. Publication of Foreign Exchange Statistics by the Central Bank of Chile
9. The name is absent
10. Prevalence of exclusive breastfeeding and its determinants in first 6 months of life: A prospective study