Fiscal devaluations in EMU

  1. Boscá Mares, José Emilio
  2. Doménech Vilariño, Rafael
Revista:
Hacienda Pública Española / Review of Public Economics

ISSN: 0210-1173

Año de publicación: 2013

Número: 206

Páginas: 27-56

Tipo: Artículo

DOI: 10.7866/HPE-RPE.13.3.2 DIALNET GOOGLE SCHOLAR lock_openAcceso abierto editor

Otras publicaciones en: Hacienda Pública Española / Review of Public Economics

Objetivos de desarrollo sostenible

Resumen

2013SummaryWe use a small open economy general equilibrium model to analyse the effects of a fiscal devalua-tion in an EMU country. The model has been calibrated for the Spanish economy, which is a goodexample of the advantages of a change in the tax mix given that its tax system shows a positive biasin the ratio of social security contributions over consumption taxes. The preliminary empirical evi-dence for European countries shows that this bias was negatively correlated with the current accountbalance in the expansionary years leading up to the 2009 crisis, a period when many EMU membersaccumulated large external imbalances. Our simulation results point to significant positive effects ofa fiscal devaluation on GDP and employment similar to the ones that could be obtained with an ex-change rate devaluation. However, although the effects in terms of GDP and employment are simi-lar, the composition effects of fiscal and nominal devaluations are not alike. In both cases, there isan improvement in net exports, but the effects on domestic and external demand are quite different

Referencias bibliográficas

  • Andrés, J.; Burriel, P. and Estrada, A. (2006), "BEMOD: A DSGE Model for the Spanish Economy and the Rest of the Euro Area". Banco de España Research Paper, No. WP-0631.
  • Boscá, J. E.; Bustos, A.; Díaz, A.; Doménech, R.; Ferri, J.; Pérez, E. and Puch, L. (2007), "The REMS-DB Macroeconomic Database of the Spanish Economy". Working Paper WP-2007-04. Ministeriode Economía y Hacienda.
  • Boscá, J. E.; Díaz, A.; Doménech, R.; Ferri, J.; Puch, L. and Pérez, E. (2010), "A Rational Expectations Model for Simulation and Policy Evaluation of the Spanish Economy". SERIEs: Journal of the Spanish Economic Association, 1-2: 135-169.
  • Boscá, J. E.; Doménech, R. and Ferri, J. (2009), "Tax Reforms and Labor market Performance: An Evaluation for Spain using REMS". Moneda y Crédito, 228: 145-196.
  • Boscá, J. E.; Doménech, R.; Ferri, J. and Varela, J. (2011), The Spanish Economy: A General Equilibrium Perspective. Palgrave MacMillan. London.
  • Boscá, J. E.; Doménech, R. and Ferri, J. (2011), "Search, Nash Bargaining and Rule of Thumb Consumers", European Economic Review, 55(7): 927-942, 2011.
  • Burriel, P.; Fernández-Villaverde, J. and Rubio, J. (2010), "MEDEA: A DSGE Model for the Spanish Economy". SERIEs: Journal of the Spanish Economic Association, 1-2: 175-243.
  • Baylor, M. (2005), "Ranking Tax Distortions in Dynamic General Equilibrium Models: A Survey".Working Paper 2005-06. Ministère des Finances. Canada.
  • Cadiou, L.; Dées, S.; Guichard, S.; Kadareja, A.; Laffargue, J. P. and Bronka Rzepkowski (2001),"Marmotte. A multinational model by CEPII/CEPREMAP". CEPII Working paper No. 2001-15.
  • Causa, O. (2008), "Explaining Differences in Hours Worked Among OECD Countries: An Empirical Analysis", OECD Economics Department Working Papers No. 596.
  • Coenen, G.; McAdam, P. and Straub, R. (2008), "Tax Reform and Labour-Market performance in the Euro Area: A Simulation-based Analysis Using the New Area-Wide Model". Journal of Economic Dynamics and Control, 32: 2.543-2.583.
  • Cogan, J. F.; Taylor, J. B.; Wieland, V. and Wolters, M. H. (2012), "Fiscal Consolidation Strategy". Discussion Paper No. 9041. CEPR.
  • Cooley, T. F. (1992), "Tax Distortions in a Neoclassical Monetary Economy". Journal of Economic Theory, 58: 290-316.
  • Crawford, I.; Keen, M. and Smith, S. (2010), "VAT and Excises" in James Mirrlees and others (eds), Dimensions of Tax Design: The Mirrlees Review, Oxford University Press for Institute for Fiscal Studies.
  • de Mooij, R. and Keen, M. (2012), "Fiscal Devaluations and Fiscal Consolidation: The VAT in Trobled Times" in A. Alesina and F. Giavazzi (eds.), Fiscal Policy after the Financial Crisis. University of Chicago Press (forthcoming).
  • Doménech, R. and García, J. R. (2008), "Unemployment, Taxation and Public Expenditure in OECD Economies". European Journal of Political Economy, 24: 202-217.
  • Erceg, C. J.; Guerrieri, L. and Gust, C. (2006), "SIGMA: A New Open Economy Model for Policy Analysis". International Journal of Central Banking, 2(1): 1-50.
  • European Commission (2013), "Study on the Impacts of Fiscal Devaluation". Taxation Papers, Working Paper N. 36.
  • Eurostat (2011), Taxation trends in the European Union. Luxembourg.
  • Farhi, E.; Gopinath, G. and Itskhoki, O. (2011), "Fiscal Devaluations". NBER Working Paper No.17662.
  • Ferri, J.; Moltó, M. L. and Uriel, E. (2009), "Time Use and Food Taxation in Spain". FinanzArchiv/Public Finance Analysis, 65: 313-334.
  • Harrison, R.; Nikolov, K.; Quinn, M.; Ramsay, G.; Scott, A. and Thomas, R. (2005), The Bank of England Quarterly Model. Bank of England.
  • IMF (2011), "Fiscal Devaluation: What Is It? and Does It Work?", in IMF Fiscal Monitor. September.
  • Kilponen, J.; Ripatti, A. and Vilmunen, J. (2004), "AINO: The Bank Of Finland's New Dynamic General Equilibrium Model Of The Finnish Economy". Bank of Finland Bulletin, 3/2004, 71-77.
  • Langot, F.; Patureauz, L. and Sopraseuth, T. (2012), "Optimal Fiscal Devaluation". Mimeo. Cepremap.
  • Lindé, J.; Nessén, M. and Söderström, U. (2004), "Monetary Policy in an Estimated Open-Economy Model with Imperfect Pass-Through". Working Paper Series 167, Sveriges Riksbank.
  • Lipinska, A. and von Thadden, L. (2009), "Monetary and Fiscal Policy Aspects of Indirect Tax Changes in a Monetaty Union". ECB Working Papers No. 1097.
  • Murchison, S.; Rennison, A. and Zhu, Z. (2004), "A Structural Small Open-Economy Model for Canada". Working Papers 04-4, Bank of Canada.
  • Nickell, S. (2006), "Work and Taxes" in J. Agell and P.B. Sorensen (eds.), Tax Policy and Labour Market Performance, Mass., MIT Press, 2006.
  • OECD (2011), Taxation and Employment, OECD Tax Policy Studies No. 21.
  • Ratto, M.; Roeger, W. and in 't Veld, J. (2009), "QUEST III: An Estimated Open-Economy DSGEModel of the Euro Area with Fiscal and Monetary Policy", Economic Modelling, 26: 222-33.
  • Riedl, A. and van Winden, F. (2012), "Input versus Output Taxation in an Experimental International Economy", European Economic Review (forthcoming).
  • Smets, F. and Wouters, R. (2003), "An Estimated Dynamic Stochastic General Equilibrium Model ofthe Euro Area". Journal of the European Economic Association, 1 (5): 1.123-1.175.
  • Stähler, N. and Thomas, C. (2012), "FiMod: a DSGE model for Fiscal Policy Simulations". Economic Modelling, 29 (2): 239-261.
Fuente de los datos: Dialnet