Please use this identifier to cite or link to this item:
https://hdl.handle.net/20.500.14279/13494
Title: | Effects of fiscal consolidation on business confidence in the Euro area | Authors: | Michail, Nektarios A. Savva, Christos S. Koursaros, Demetris |
Major Field of Science: | Social Sciences | Field Category: | Economics and Business | Keywords: | Fiscal shocks;Favar;Expectations | Issue Date: | Jun-2018 | Source: | Economics and Business Letters, 2018, vol. 7, no. 2, pp. 76-83 | Volume: | 7 | Issue: | 2 | Start page: | 76 | End page: | 83 | Journal: | Economics and Business Letters | Abstract: | We employ a factor-augmented VAR (FAVAR) covering both domestic and international developments to examine the confidence effects of a fiscal shock, using a sample of six euro area countries. The results indicate that following a shock in total government expenditure, responses are country-specific, while a weak geographical pattern, i.e. a distinction between core and periphery countries can be observed. Overall, the confidence response is short-lived and returns to zero after a few quarters. Heterogeneity in country responses also indicates that the Bachmann and Sims (2012) conclusion suggesting the endogenous response of confidence can explain almost all of the fiscal-driven output expansion in recessions, may hold only in country-specific cases. | ISSN: | 22544380 | DOI: | 10.17811/ebl.7.2.2018.76-83 | Rights: | © N. Michail et al. | Type: | Article | Affiliation : | Cyprus University of Technology |
Appears in Collections: | Άρθρα/Articles |
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