Automatic stabilizers in the Eurozone: analysis of their effectiveness at the member state and euro area level and in international comparison

Publication type:

Report

Authors

Mathias Dolls, Clemens Fuest, Jan Kock, Andreas Peichl, Nils Wehrhöfer and Christian Wittneben

Publication date

15 Nov 2014

Summary

We analyze the effectiveness of fiscal policy in general and automatic stabilizers in particular to stabilize output in Eurozone member states under the current institutional framework of fiscal governance. First, a descriptive analysis based on macro data is conducted for the period 2007-2014, both for ex-post as well as real-time data. In the second step, we analyze the potential of automatic stabilizers for output stabilization in steady state, i.e., when member states have achieved balanced budgets, using micro data and microsimulation tools for Europe and the United States.

Subjects

Microsimulation and International Economic Relations

Links

http://ftp.zew.de/pub/zew-docs/gutachten/ZEWAutomaticStabilizersEurozone2015.pdf