Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/264492 
Year of Publication: 
2022
Series/Report no.: 
ECB Working Paper No. 2666
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
This paper proposes a central fiscal capacity for the euro area that generates transfers in response to euro area, country, and region-specific shocks. The main novelty of this fiscal capacity is that it allows a joint response to these three types of shocks within a single scheme. Based on NUTS3 regional data over the last two decades and regional fiscal multiplier estimates, our analysis shows that - with a limited risk of moral hazard - substantial stabilisation could have been achieved in response to the eurozone and regional shocks, while country-specific shocks were on average less severe and therefore needed less stabilisation.
Subjects: 
Central scal capacity
macroeconomic stabilisation
multilevel factor model
Bayesian inference
JEL: 
C38
E32
E62
E63
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-5115-9
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.