The Effects of Government Spending in the Eurozone

• 成果类型: Article
• 署名作者: Gabriel, Ricardo Duque; Klein, Mathias; Pessoa, Ana Sofia
• 署名单位: University of Bonn; Sveriges Riksbank
• 刊物名称: JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION
• ISSN/ISSBN: 1542-4766
• DOI: 10.1093/jeea/jvad006
• 发表日期: 2023
• 页码: 1397-1427
• 关键词: monetary union evidence; fiscal stimulus; cyclical behavior; multipliers; POLICY; spillovers; RECOVERY; GROWTH; cost

摘要

Using a newly assembled rich dataset at the regional level, this paper provides novel empirical evidence on the effects of fiscal policy in the Eurozone. Our baseline estimates reveal a government spending relative output multiplier around 2, an employment multiplier of 1.4, and a cost per job created of approximately euro30,000. Moreover, we find that a regional fiscal stimulus leads to a significant increase in private investment, productivity, and durable consumption. The labor share also increases, as do total hours worked driven by changes in the extensive margin (total employment), whereas the intensive margin (hours per worker) barely reacts. Contrary to the common policy narrative of strong positive spillover effects, we estimate only small regional fiscal spillovers. Finally, our findings reveal strong heterogeneities across economic sectors, states of the economy, and member states.