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Interactions between Monetary and Fiscal Policies

2526 February 2010
Madrid
Conferences

Information

Monetary and fiscal authorities have undertaken ambitious and innovative policy interventions in response to the recent financial crisis. To better understand the effects of these policies, the Banco de España organised a conference on "Interactions between monetary and fiscal policies", held in Madrid on February 25-26, 2010.

Questions of particular interest for the conference include the quantitative effects of monetary and fiscal policies and their interactions; monetary and fiscal policies in the context of a currency union; and long-run fiscal implications and exit strategies.

Invited speakers included Giancarlo Corsetti (EUI), Philip Lane (Trinity College), Eric Leeper (Indiana Univ.), Albert Marcet (LSE), Roberto Perotti (IGIER), and Volker Wieland (Goethe Univ. Frankfurt).

More information

Presentations

25 February 2010
Session 1
08.30 - 10.45
Chair: José Luis Malo de Molina (Banco de España)

"Unfunded liabilities’ and uncertain fiscal financing" File PDF: Opens in a new window (683 KB)
Troy Davig (Fed Kansas City), Eric Leeper (Indiana University) and Todd B. Walker (Indiana University) 

Discussant: Oscar J. Arce (CNMV). Discussant: Unfunded liabilities’ and uncertain fiscal financing File PDF: Opens in a new window (358 KB)

"Fiscal sustainability in a new keynesian model" File PDF: Opens in a new window (294 KB)
Campbell Leith (University of Glasgow) and Simon Wren-Lewis (University of Oxford)

Discussant: Javier Andrés (Universidad de Valencia). Dicussant: Fiscal sustainability in a new keynesian model File PDF: Opens in a new window (251 KB)

Session 2
11.15 - 13.15
Chair: Christiane Nickel (European Central Bank)

"Keynesian government spending multiplier and spillovers in the euro area" File PPT: Opens in a new window (2 MB)
Tobias Cwik (Goethe University, Frankfurt) and Volker Wieland (Goethe University, Frankfurt)

Discussant: Massimiliano Pisani (Banca d’Italia). Discussant: "Keynesian government spending multiplier and spillovers in the euro area" File PDF: Opens in a new window (228 KB)

"Fiscal multipliers and open economy spillovers in a model with labour turnover costs" File PDF: Opens in a new window (261 KB)

Ester Faia (Goethe University, Kiel IFW and CEPREMAP), Wolfgang Lechthaler (Kiel IFW) and Christian Merkl (Kiel IFW, Christian Albrechts University and IZA)./p>

Discussant: Raffaela Giordano (Banca d’Italia). Discussant: "Fiscal multipliers and open economy spillovers in a model with labour turnover costs" File PPT: Opens in a new window (56 KB)

Session 3
14.30 - 16.00
Chair: Juan Varela (Spanish Ministry of Economics)

"On ricardian equivalence and twin divergence: the spanish experience in the 2009 crisis" File PDF: Opens in a new window (390 KB)
Miguel Cardoso (BBVA) and Rafael Domenech (BBVA and Universidad de Valencia)

Discussant: Guido Ascari (Università di Pavia). Discussant: "On ricardian equivalence and twin divergence: the spanish experience in the 2009 crisis" File PPT: Opens in a new window (410 KB)

"Fiscal policy and external imbalances: a quantitative evaluation for Spain" File PDF: Opens in a new window (417 KB)
Francisco Jimeno, Pablo Hernández de Cos and Juan Rojas (Banco de España)

Discussant: Gernot Müller (University of Bonn and CEPR). Discussant: "Fiscal policy and external imbalances: a quantitative evaluation for Spain" File PPTX: Opens in a new window (268 KB)

Session 4
16.30 - 19.30
Chair: Eduardo Ley (World Bank)

"Fiscal shocks and the real exchange rate" File PDF: Opens in a new window (358 KB)
Philipp Lane (Trinity College Dublín)

Discussant: Davide Furceri (OECD). Discussant: "Fiscal shocks and the real exchange rate" File PPT: Opens in a new window (264 KB)

"On the international dimension of fiscal policy" File PDF: Opens in a new window (273 KB)
Gianluca Benigno (London School of Economics, CEP and CEPR) and Bianca de Paoli (Bank of England and London School of Economics)

Discussant: Hubert Kempf (Banque de France). Discussant: "On the international dimension of fiscal policy" File PDF: Opens in a new window (21 KB)

"Monetary policy matters: new evidence based on a new shock measure" File PDF: Opens in a new window (292 KB)
S. Mahdi Barakchian (Cambridge University) and Christopher Crowe (IMF)

Discussant: Luca Gambetti (Universitat Autònoma de Barcelona). Discussant: "Monetary policy matters: new evidence based on a new shock measure" File PDF: Opens in a new window (122 KB)

26 February 2010
Session 5
08.30 - 10.30
Chair: Karsten Wendorff (Deutsche Bundesbank)

"When, where and how does fiscal stimulus work?" File PDF: Opens in a new window (254 KB)
Giancarlo Corsetti (EUI, Florence), Gernot Müller (University of Bonn and CEPR) and André Meier (IMF)

Discussant: Bianca di Paoli (London School of Economics). Discussant: "When, where and how does fiscal stimulus work?" File PDF: Opens in a new window (92 KB)

"Insulation impossible: fiscal spillovers in a monetary union" File PDF: Opens in a new window (608 KB)
Russell Cooper (University of Texas), Hubert Kempf (Banque de France) and Dan Peled (University of Haifa)

Discussant: Evi Pappa (Universitat Autònoma de Barcelona). Discussant: "Insulation impossible: fiscal spillovers in a monetary union" File PPT: Opens in a new window (268 KB)

Session 6
11.00 - 13.00
Chair: José María Labeaga (Institute for Fiscal Studies, Madrid)

"Optimal fiscal policies. Long bonds and interest rate policy under incomplete markets" File PDF: Opens in a new window (278 KB)
Elisa Faraglia (Institut d’Anàlisi Econòmica, CSIC), Albert Marcet (London School of Economics) and Andrew Scott (London Business School)

Discussant: Isabel Correia (Banco de Portugal). Discussant: "Optimal fiscal policies. Long bonds and interest rate policy under incomplete markets" File PDF: Opens in a new window (48 KB)

"Optimal fiscal and monetary response to financial shocks" File PDF: Opens in a new window (588 KB)
Harris Dellas (University of Bern), Behzad Diba (Georgetown University) and Olivier Loisel (Banque de France)

Discussant: Luisa Lambertini (Ecole Polytechnique Federale de Lausanne). Discussant: "Optimal fiscal and monetary response to financial shocks" File PDF: Opens in a new window (139 KB)

Closing speech
13.15 - 14.00
Chair: José Luis Malo de Molina (Banco de España)

José Manuel González-Páramo (ECB’s Executive Board). Closing speech.Opens in a new window