Documents Canova, Fabio 3 results

"This paper empirically investigates whether the theoretical conditions for government expenditure expansions to be effective, hold for the data. We ask whether the necessary conditions for fiscal effectiveness are relevant on average, and in special circumstances that capture features of the recent crisis. Fiscal policy can be an effective countercyclical tool if monetary policy accommodates the fiscal expansion, if expectations about future output growth and inflation are constant, and if structural relationships are invariant to the policy change. Recent expansions are unlikely to produce large output multipliers or have important debt or inflation effects. Credible deficit and debt reduction schemes can produce sizeable output multipliers."

"We study sectoral business cycles for industry across EU countries, looking in particular how these are affected by common exogenous shocks (this is our definition of resilience), and investigate whether product market regulations play a role in minimising such fluctuations. The analysis is conducted for the period 1980-2008, and separately for the 2008-09 downturn. We find robust evidence that product market regulations help in explaining differences in the adjustment capacity of sectors. In addition we identify which sectors are consistently less resilient across the EU and provide information about how these translate to country differences. A number of policy recommendations emerge from the analysis which can be useful when designing structural reform strategies at the EU level."