Fiscal Policies in High Debt Euro-Area Countries

In this book we aim to measure fiscal policy in the Euro Area by using
structural VAR (Vector Autoregression) and Panel VAR methodologies. In particular,
we focus on a group of Euro-area countries affected by high public and/or high private
debt. We show that the fiscal austerity has exerted significant recessionary effects
in Greece, Italy and Portugal, i.e. high public debt countries but, instead, has had
expansionary effects on aggregate output in high private debt economies like Ireland,
the Netherlands and Spain. In this book we also motivate the importance for the Euro
Area of a fiscal union for purposes of macroeconomic stabilization and, moreover,
study spillovers from German fiscal expansions to the other Eurozone economies.
We investigate the effects of fiscal shocks on a wide set of macroeconomic variables
and also consider the labour market outcomes of fiscal austerity in a set of Euro-area
Member States.