German Public Finances Through the Financial Crisis

Abstract

Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. AbstractThe German experience of the crisis was very different compared to those of most other countries in Europe. Germany was hit by a very strong shock which was relatively concentrated in the exporting, manufacturing industries. In addition, the German labour market was very resilient during the crisis due to earlier labour market reforms and policy instruments facilitating labour hoarding. As a consequence, public finances were only moderately affected and not many policy reforms had to be enacted. This chapter will present the German experience of the financial crisis. We start by presenting the macroeconomic situation and how the crisis unfolded in Germany, before focusing on the situation of public finances. Finally, we analyse the policy responses to the financial crisis.JEL Classification: H12, H23, H32, H60

European Public Finances and the Great Recession: France, Germany, Ireland, Italy, Spain and the United Kingdom Compared

“…This special issue of Fiscal Studies contains papers examining the evolution of the public finances in six European countries – André et al. for France, Blömer et al. for Germany, Keane for Ireland, Figari and Fiorio for Italy, Martí and Pérez for Spain and Emmerson and Tetlow for the United Kingdom.…”

How Loose, How Tight? A Measure of Monetary and Fiscal Stance for the Euro Area

“…The component of the fiscal policy of the rest of the EA, DM F CI F * , is not reported since its role is very limited.34 The model features two fiscal policy shocks, government spending and tax rate. When disentangling the role of the two discretionary fiscal policy instruments in the historical decomposition, it is clear that the role of tax shocks is more limited than that of government spending shocks (on this see alsoCoenen et al, 2013 andBlomer et al, 2015). Hence, we are reporting the responses of the government spending shocks, which are quantitatively more important.35 The large effect of monetary policy on inflation can be partly due to the fact that our observable variable is GDP deflator inflation instead of HIPC inflation (seeConti and Nobili, 2019).…”