Keynesian government spending multipliers and spillovers in the euro area

The global financial crisis has lead to a renewed interest in discretionary fiscal stimulus. Advocates of discretionary measures emphasize that government spending can stimulate additional private spending — the so-called Keynesian multiplier effect. Thus, we investigate whether the discretionary spending announced by Euro area governments for 2009 and 2010 is likely to boost euro area GDP by more than one for one. Because of modeling uncertainty, it is essential that such policy evaluations be robust to alternative modeling assumptions and different parameterizations. Therefore, we use five different empirical macroeconomic models with Keynesian features such as price and wage rigidities to evaluate the impact of fiscal stimulus. Four of them suggest that the planned increase in government spending will reduce private spending for consumption and investment purposes significantly. If announced government expenditures are implemented with delay the initial effect on euro area GDP, when stimulus is most needed, may even be negative. Traditional Keynesian multiplier effects only arise in a model that ignores the forward-looking behavioral response of consumers and firms. Using a multi-country model, we find that spillovers between euro area countries are negligible or even negative, because direct demand effects are offset by the indirect effect of euro appreciation

Keynesian government spending multipliers and spillovers in the euro area

The global financial crisis has lead to a renewed interest in discretionary fiscal stimulus. Advocates of discretionary measures emphasize that government spending can stimulate additional private spending — the Keynesian multiplier effect. Thus, we investigate whether the spending package announced by Euro area governments for 2009 and 2010 is likely to boost GDP by more than one for one. Because of modeling uncertainty, it is essential that such policy evaluations be robust to alternative modeling assumptions and parameterizations. We use five different empirical macroeconomic models with Keynesian features such as price and wage rigidities to evaluate the impact of the fiscal stimulus. Four of them suggest that the planned increase in government spending will reduce private consumption and investment significantly. Only a model that largely ignores the forward-looking behavioral response of consumers and firms implies crowding-in of private spending. We review a range of issues that may play a role in the recession of 2008-2009. Implementation lags are found to reinforce crowding-out and may even cause an initial contraction. Zero-bound effects may lead the central bank to abstain from interest rate hikes and increase the GDP impact of government spending. Crowding-in, however, requires an immediate anticipation of at least two years at the zero bound. Using a multi-country model, we find that spillovers between euro area countries are negligible or even negative, because direct demand effects are offset by the indirect effect of an euro appreciation. New-Keynesian DSGE models provide a strong case for government savings packages. Announced with sufficient lead time, spending cuts induce a significant short-run stimulus and crowding-in of private spending. JEL Classification: E62, E63, H31Fiscal Policy, government spending multipliers, Model uncertainty, New-Keynesian models

Zur Übertragung von Geld- und Fiskalpolitik in DSGE-Modellen

In my dissertation I study the transmission of monetary and fiscal policy in New Keynesian DSGE models. In the first chapter we revisit the exchange rate channel in a two-country model of the U.S. and a panel of industrialized countries to analyse how monetary policy transmission in the U.S. changes if it becomes more trade integrated. We find that more openness lowers the sacrifice ratio, although the effect is quantitatively small and depends on the pricing of the firms. In the second chapter we simulate the impact of the U.S. fiscal stimulus package in 2009 on GDP. We find that the government spendingmultiplier is well below 1. The finding is robust to including rule-of-thumb consumers and simulating the stimulus in the recent recession. In the third chapter we collect the fiscal stimulus measures in the eleven biggest countries of the euro area. Then we do a robustness study by simulating the european package in five different models of the euro area. The macroeconomic models vary in terms of backward-looking decision making of the agents and openness. Our findings provide no support for a Keynesian multiplier. Instead they suggest that additional government spending will reduce private spending for consumption and investment purposes. If government spending faces an implementation lag, the initial effect on GDP may even be negative. In the fourth chapter I estimate a DSGE model for Germany and compute forecasts for the debt-to-GDP ratio. I find that the expected economic recovery will lead to a decrease in Germany’s indebtedness in the medium-term given that policy makers stick to the fiscal policy rules.Meine Doktorarbeit besteht aus vier Kapiteln, die sich mit der Wirkung und Übertragung von Geld- und Fiskalpolitik in makroökonomischen Modellen befassen. In Kapitel 1 analysieren wir die Wirkung von Globalisierung ausgedrückt durch eine größere Offenheit einer Volkswirtschaft auf die Transmission von Geldpolitik am Beispiel der USA. Wir implementieren einen zusätzlichen Wechselkurskanal in ein Zweiländermodell der USA und der Europäischen Währungsunion. Heimische Firmen berücksichtigen bei Ihrer Preissetzung nicht nur die Preise Ihrer Konkurrenten im Inland sondern auch die der Konkurrenten aus dem Ausland. Nach einer Zinserhöhung der Zentralbank, die zu einer Aufwertung des Wechselkurses und sinkenden Importpreisen führt, steigt der Wettbewerbsdruck auf heimische Firmen. Diese reduzieren Ihre Gewinnmargen und senken damit die heimischen Preise. Wir schätzen das Modell mit Daten der USA und der Euro-Zone und simulieren die Auswirkung von Globalisierung durch Erhöhen des Importanteils am BIP. Wir finden, dass Globalisierung den Zielkonflikt der Zentralbank verringert. Um eine gegebene Reduzierung der Inflation zu erreichen, muss sie einen geringeren Rückgang des Bruttoinlandsprodukts in Kauf nehmen. In Kapitel 2 simulieren wir den Effekt des diskretionären Konjunkturpakets der USA („American Recovery and Reinvestment Act (ARRA)“), verabschiedet im Februar 2009, auf das Bruttoinlandsprodukt in den USA in einem makroökonomischen Modell. Wir finden, dass das Konjunkturpaket das BIP um weniger als eins-zu-eins erhöht, der Staatsausgabenmultiplikator also kleiner als eins ist. Dabei spielt der Zeitpfad der zusätzlichen Staatsausgaben eine große Rolle. Je länger es dauert die Staatsausgaben zu realisieren, desto geringer ist der Effekt in 2009. Wir untersuchen die Robustheit der Ergebnisse, indem wir das Modell um einen Anteil liquiditätsbeschränkter Konsumenten erweitern und das Konjunkturpaket in der aktuellen Rezession, in der die amerikanische Zentralbank den Nominalzins auf null gesenkt hat, simulieren. In Kapitel 3 erstellen wir eine detaillierte Übersicht der Konjunkturpakete der elf größten Volkswirtschaften in der Europäischen Währungsunion und messen die Wirkung des gesamteuropäischen Konjunkturpakets in fünf makroökonomischen Modellen in Analogie zu der Analyse in Kapitel 3. Wir finden auch für die Euro-Zone ein Verdrängen privater Ausgaben für Konsum und Investitionen. Eine geldpolitische Akkommodierung durch Konstanthalten des Nominalzinses in 2009 hilft, ist aber nicht ausreichend, um das Verdrängen privater Ausgaben auszugleichen. Darüber hinaus analysieren wir die Wirkung des deutschen Konjunkturpakets auf das BIP in Frankreich und Italien. Wir finden nur sehr geringe „Spillover“-Effekte, da innerhalb der europäischen Währungsunion direkte positive Nachfrageeffekte durch den negativen indirekten Effekt der Aufwertung des Euro ausgeglichen werden. In Kapitel 4 befasse ich mich mit der Dauer und den makroökonomischen Implikationen des Schuldenabbaus in Deutschland. Ich leite ein makroökonomisches Modell mit detailliertem Staatssektor her, welches sowohl fiskalpolitische Regeln für den Mehrwertsteuersatz, Kapitalsteuersatz und Einkommenssteuersatz als auch die 2009 vom Bundestag verabschiedete Schuldenbremse integriert. Ich schätze das Modell auf deutsche Daten und erstelle Szenarien für die mittelfristige Entwicklung der Verschuldung relativ zum Bruttoinlandsprodukt. Ich finde, dass es durch die erwartete ökonomische Erholung nach der Finanzkrise in 2008 und 2009 möglich ist die Staatsverschuldung relativ zum BIP signifikant zu reduzieren, wenn die Regierung nicht von den Fiskalregeln abweicht

La otra inmigración a Argentina: el caso de Adolf Eichmann

Abstract Adolf Eichmann arrived to Argentina along with other 500 runaway Nazis thorugh a smuggling network between 1945 and 1955. This network was the result of the interest shown by the The Republic of Argentina, the Red Cross, Caritas and the Vatican in one hand; in the other, the criminals of war. Eichmann, the face of Hanna Arendt’s t “Banality of Evil” had numerous troubles to integrate to argentinian society, failing as a result. Adolf Eichmann, born in 1906 in Solingen, Germany, personified a typical Austrian-german postwar character, a fact that conduced to his laboral failure in the twentys and early thirties of the twentieth century.  Adolf Eichmann llegó a la Argentina como otros 500 Nazis forajidos a través de una red de traficantes ilegales de migrantes entre 1945 y 1955. Esta red fue el resuldado del interés de la República de Argentina, la Cruz Roja, la Caritas y el Vaticano por un lado y por el otro los delincuentes. Eichmann la cara de la ‘banalidad del mal’, como Hannah Arendt escribió en su libro “Eichmann en Jerusalén: un estudio sobre la banalidad del mal” (2ª. edición, traducción de Carlos Ribalta, Barcelona, Lumen, 1999) tuvo bastantes problemas para integrarse en la sociedad argentina y por ende, fracasó. Adolf Eichmann nacido en 1906 en Solingen/Alemania personificó un caractér típico de la sociedad en la posguerra austriaca-alemana, lo que hizo que fracasara en su vida laboral varias veces durante los veintes y los inicios de los treinta del siglo XX.       &nbsp

Pursuit of a Chiral Amino Aldehyde Intermediate in the Synthesis of (+)-Obafluorin, a B-Lactone Antibiotic

This research is focused on synthesizing a chiral amino aldehyde from L-Serine. The proposed synthesis of the amino aldehyde would yield a stereochemically pure product working through an L-Serine beta-lactone intermediate. The amino aldehyde is a proposed intermediate in the synthesis of (+)-obafluorin, a beta-lactone antibiotic of interest. The proposed synthesis might provide a simpler, more versatile way to synthesize obafluorin

Forced to Flee and Forced to Repatriate? How the Cessation Clause of Article 1C(5) and (6) of the 1951 Refugee Convention Operates in International Law and Practice

The purpose of refugee law is to provide international protection for vulnerable people who are denied state protection. In fulfilling this purpose, the United Nations High Commissioner for Refugees (UNHCR) and asylum states have different legal foundations and implementing materials. When terminating refugee status and protection under the 1951 Refugee Convention Relating to the Status of Refugees, the obligations and legal authorities of UNHCR and asylum states differ. The UNHCR implementing statute allows the facilitation of voluntary repatriation when refugees can return in safety and with dignity. In contrast, host states are able to mandate repatriation when a change in circumstances occurs in the country of origin. The different evidentiary thresholds for voluntary and mandated repatriation have created deep confusion regarding states\u27 ability to end refugee status and the UNHCR\u27s role in facilitating returns. This Note proposes placing voluntary and mandated repatriation on a timeline contingent on developments in the country of origin. Using the current displacement of Rwandan refugees from Uganda as a case study, this Note reconciles the conflicting standards in international law through this timeline

La otra inmigración a Argentina: el caso de Adolf Eichmann

Abstract Adolf Eichmann arrived to Argentina along with other 500 runaway Nazis thorugh a smuggling network between 1945 and 1955. This network was the result of the interest shown by the The Republic of Argentina, the Red Cross, Caritas and the Vatican in one hand; in the other, the criminals of war. Eichmann, the face of Hanna Arendt’s t “Banality of Evil” had numerous troubles to integrate to argentinian society, failing as a result. Adolf Eichmann, born in 1906 in Solingen, Germany, personified a typical Austrian-german postwar character, a fact that conduced to his laboral failure in the twentys and early thirties of the twentieth century.  Adolf Eichmann llegó a la Argentina como otros 500 Nazis forajidos a través de una red de traficantes ilegales de migrantes entre 1945 y 1955. Esta red fue el resuldado del interés de la República de Argentina, la Cruz Roja, la Caritas y el Vaticano por un lado y por el otro los delincuentes. Eichmann la cara de la ‘banalidad del mal’, como Hannah Arendt escribió en su libro “Eichmann en Jerusalén: un estudio sobre la banalidad del mal” (2ª. edición, traducción de Carlos Ribalta, Barcelona, Lumen, 1999) tuvo bastantes problemas para integrarse en la sociedad argentina y por ende, fracasó. Adolf Eichmann nacido en 1906 en Solingen/Alemania personificó un caractér típico de la sociedad en la posguerra austriaca-alemana, lo que hizo que fracasara en su vida laboral varias veces durante los veintes y los inicios de los treinta del siglo XX.       &nbsp

The Interplay of Lattice, Spin, and Charge Degrees of Freedom in Layered Cobaltates

In this thesis the structural and magnetic properties of the single-layered perovskite La(2-x)Sr(x)CoO(4) were investigated by means of x-ray diffraction and neutron scattering over a wide doping (0.05 <= x <= 1.1) and temperature (1.5 <= T <= 1000 K) range. The interplay between structural distortions, antiferromagnetic spin correlations, and charge order was studied in detail and is discussed in comparison with the closely related compounds, La(2-x)Sr(x)CuO(4+delta) and La(2-x)Sr(x)NiO(4+delta). The so-called low temperature orthorhombic (LTO) distortion of the tetragonal (HTT) K(2)NiF(4)-type structure is lifted at x_LTO ~ 0.25 Sr doping at room temperature. It is shown that the variation of the lattice constants near the HTT/LTO phase boundary is due to steric effects, i.e. induced by a cooperative tilt of the corner-sharing CoO_6 octahedra. At higher doping the HTT structure is stabilized and the lattice volume decreases according to chemical pressure by the substitution of La(3+) ions with Sr(2+) ions and the removal of charge carriers from the CoO_2 layers. While the La coordination anisotropy is smoothly reduced with doping, the Co-O_apical bond-length exhibits a steep decrease near x ~ 0.45. This decrease cannot be attributed to the reduction of structural strains in the system, but to an electronic origin. The decrease suggests a Co(3+) spin-state transition from the high-spin to the low-spin state at room temperature with doping. A Co(3+) low-spin state in La(1.5)Sr(0.5)CoO(4) at room temperature is supported by the anomalous increase of the out-of-plane and the nearly constant in-plane lattice constant at higher temperatures. The quantitative analysis of the checkerboard-like charge order in La(1.5)Sr(0.5)CoO(4) on a large set of superstructure reflections reveals a oxygen-displacement modulation of the CoO_6 octahedra, which is not Jahn-Teller active. This is in contrast to the oxygen-displacement modulation and the Co(3+) intermediate-spin occupation, previously proposed in the literature. Commensurate, antiferromagnetic nearest-neighbor exchange between Co spins with a spin moment within the CoO_2 layer is found in the spin-glass phase up to x = 0.3. This doping level is below the site-percolation threshold (x_c ~ 0.41) on a square lattice. The nearest-neighbor exchange, similar to the parent compound La(2)CoO(4), is stabilized by a Co(3+) high-spin state in the insulating phase or the reduction of the hole mobility. Further Sr doping induces a short-ranged incommensurate magnetic order. The incommensurability increases nearly linear with increasing hole density and a maximum of the in-plane correlation length at half doping is observed. First indications are thereby found for a stripe-like spin arrangement in single-layered cobaltates with 0.4 <= x <= 0.6. An effective Co(2+) next-nearest-neighbor exchange and a weak interlayer coupling stabilize the spin order in La(1.5)Sr(0.5)CoO(4)

Does trade integration alter monetary policy transmission?

This paper explores the role of trade integration—or openness—for monetary policy transmission in a medium-scale New Keynesian model. Allowing for strategic complementarities in price-setting, we highlight a new dimension of the exchange rate channel by which monetary policy directly impacts domestic inflation. Although the strength of this effect increases with economic openness, it also requires that import prices respond to exchange rate changes. In this case domestic producers find it optimal to adjust their prices to exchange rate changes which alter the domestic currency price of their foreign competitors. We pin down key parameters of the model by matching impulse responses obtained from a vector autoregression on U.S. time series relative to an aggregate of industrialized countries. While we find evidence for strong complementarities, exchange rate pass-through is limited. Openness has therefore little bearing on monetary transmission in the estimated model

New Keynesian Versus Old Keynesian Government Spending Multipliers

Renewed interest in fiscal policy has increased the use of quantitative models to evaluate policy. Because of modelling uncertainty, it is essential that policy evaluations be robust to alternative assumptions. We find that models currently being used to evaluate fiscal policy stimulus proposals are not robust. Government spending multipliers in an alternative empirically-estimated and widely-cited new Keynesian model are much smaller than in these old Keynesian models; the estimated stimulus is extremely small with GDP and employment effects only one-sixth as large and with private sector employment impacts likely to be even smaller.Keynesianism, fiscal policy, fiscal stimulus, multiplier