Size Effects of Fiscal Policy and Business Confidence in the Euro Area

Michail, Nektarios; Savva, Christos S.; Koursaros, Demetris

doi:10.3390/ijfs5040026

Cited by 6 publications

(4 citation statements)

References 49 publications

(58 reference statements)

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“…The result, in line with Michail et al (2017) and Barksy and Sims (2012) highlights the fact that business confidence plays an important role in the economy. The main point of this paper is summarised in Figure 2, which depicts the response of business confidence in the six euro-area countries following a 1% negative shock in government spending.…”

Section: Resultssupporting

confidence: 82%

“…With the literature on fiscal multipliers tremendously enhanced since the onset of the European sovereign debt crisis, studies on the effects of fiscal consolidations on confidence still remain few, even though it has been documented that confidence has a strong effect on the economy (Bachmann and Sims, 2012;Michail et al, 2017). Of the few existing studies, Beetsma et al (2015), find that, in a panel of OECD countries, consolidations affect consumer confidence negatively.…”

Section: Introductionmentioning

confidence: 99%

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Effects of fiscal consolidation on business confidence in the Euro Area

2018

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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 explaining almost all of the fiscal-driven output expansion in recessions, may hold only in country-specific cases.

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Section: Resultssupporting

confidence: 82%

Section: Introductionmentioning

confidence: 99%

Effects of fiscal consolidation on business confidence in the Euro Area

2018

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“…As often used in the literature, we employ a Principal Components Analysis (PCA), as popularized by Stock and Watson (2002), and used by other authors in a variety of applications (e.g. Bernanke et al 2005;Michail et al 2017;Prüser and Schlösser 2020) to aggregate the commodities. Reader may refer to Watson (2002, 2006) for more information regarding the PCA methodology.…”

Section: Methodology and Datamentioning

confidence: 99%

Can commodity prices predict stock market returns? The case of dry bulk shipping companies

Melas,

Michail

2024

J. shipp. trd.

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We explore the relationship between the returns of 45 dry bulk shipping company stock prices and the main 15 commodities that bulk carriers transport. Using a principal component analysis to reduce the dimensionality of the commodities dataset and a panel methodology, we find that a change in the commodity price principal component would result in a 0.6% change in the returns of the shipping stock prices. Minerals appear to have a stronger impact, as a 1% change in the minerals principal component results in a 1.1% change in the returns. This is mainly due to the fact that minerals account for larger trade volumes in the dry bulk market and they employ mostly bigger vessels, while the price of Brent oil is also an important factor affecting shipping stock prices.

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“…Michail, Savva and Koursaros (2017) have studied the impact of fiscal consolidation process on the confidence of economic agents, which has a decisive influence on consumer and investment decisions in that economy [14].…”

Section: Literature Reviewmentioning

confidence: 99%

Fiscal Adjustment Programs versus Socially Sustainable Competitiveness in EU Countries

et al. 2018

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After implementing harsh austerity measures during 2008–2011, in the period 2012–2014 the fiscal adjustment programs also involved social equity measures, the quantitative fiscal consolidation being changed into a qualitative one—a reduction of the structural budget deficit accompanied by an improvement of social sustainability indicators. The 2015–2017 period shows mixed evolutions in terms of social progress brought by the recovery of the economic potential lost during the crisis. This research analyzes the sustainability of economic competitiveness dynamics from a social viewpoint during 2012–2014. In this paper, we analyze the way in which the economic and social components of fiscal adjustment programs are dynamically balanced in 24 EU member states. We identify four clusters of countries depending on the relationship between fiscal consolidation/fiscal stimulation and the social dynamics of the sustainability adjusted global competitiveness index. We found that under the pressure of “fiscal adjustment fatigue” caused by tough austerity programs in the period 2008–2011, most of the European countries completed the fiscal adjustment packages with measures to improve the social situation between 2012 and 2017. The fiscal consolidation programs have become more balanced from the perspective of the combination of budgetary austerity—social equity measures. Furthermore, we analyze how some countries on the EU periphery (Central and Eastern Europe, Baltic countries and Portugal, Ireland and Greece, countries that have joined the EU with a lower level of development) are experiencing or not an improvement in the social sustainability generated by the measures aimed at stimulating the economic growth implemented during 2012–2017. To conclude, we proposed a few pillars that could be integrated if an “ideal adjustment program” is to be achieved.

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Size Effects of Fiscal Policy and Business Confidence in the Euro Area

Cited by 6 publications

References 49 publications

Effects of fiscal consolidation on business confidence in the Euro Area

Effects of fiscal consolidation on business confidence in the Euro Area

Can commodity prices predict stock market returns? The case of dry bulk shipping companies

Fiscal Adjustment Programs versus Socially Sustainable Competitiveness in EU Countries

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