Autori: Alessandro Caiani, Ermanno Catullo, Mauro Gallegati
Tipologia: contributo in volume
Titolo volume: Industrial and Corporate Change.
Volume/numero/pagina: Volume 27, Issue 6, pp. 1123–1154.
Anno pubblicazione: 2018
Editore: Oxford University Press
ISSN: 1464-3650
DOI: https://doi.org/10.1093/icc/dty016
Abstract:
We present an Agent Based-Stock Flow Consistent Multi-Country model of a Monetary Union to analyze the impact of a change in the fiscal regime of member countries, modeled as a permanent change in the deficit-to-gross domestic product (GDP) target that governments are committed to comply. Simulations are performed under three scenarios, differentiated by the number of countries considered (2, 6, 10). The parametric configuration employed yields economically reasonable values for the dynamics and relative dimension of key variables, broadly comparable with historical data and available stylized facts. Our policy experiments show that fiscal expansions generally allow to improve the dynamics of real GDP, labor productivity, and employment, though being generally associated with higher levels of public debt. Conversely, permanent fiscal contractions always exert strong recessionary effects, exacerbate real GDP volatility, and tend to be self-defeating in the long run. In scenarios where the Monetary Union includes a greater number of countries and the common market is bigger, fiscal austerity raises—rather than decreasing—average public debt-to-GDP ratios. We show that this is mainly related to a raise of debt-to-GDP in poorer and less productive countries mirrored by a reduction of their net foreign asset position.
URL: https://academic.oup.com/icc/article-abstract/27/6/1123/4964718?redirectedFrom=fulltext