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Nonlinear and uncertainty effects of macroeconomic policies - PRIN 2017

Progetti nazionali
Programma di ricerca
PRIN 2017
03/04/2019 - 28/10/2023
Luca Gambetti

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Descrizione del progetto

The aim of the present project is to study the nonlinear effects of monetary and fiscal policy. In particular, we shall focus on four key policy issues: Are the effects of monetary policy asymmetric? Is the fiscal stimulus more effective during economic downturns? Do monetary and fiscal shocks interact in some way? Does macroeconomic policy uncertainty, and in particular fiscal policy uncertainty, affect economic activity?
If monetary policy is ineffective to foster recovery, it should be used in combination with the fiscal stimulus, in line with the Keynesian stance. The Keynesian view would obtain further support from a positive answer to Question (2). Interactions between monetary and fiscal shocks would provide additional motivation for a coordination of fiscal and monetary policy. In the Euro area, coordination requires greater tax and spending integration. Lastly, empirical results about Question (4) may provide useful insights about the way in which fiscal policy measures should be formulated and announced.
To address these questions we shall use a new simple model, which encompasses the standard VAR model as a special case. Our model can be estimated by means of ordinary least squares. Standard tests for nested models can be used to test for linearity.

Ultimo aggiornamento: 01/03/2024 09:46
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