The aggregate effects of government income transfer shocks - EU evidence

Series: Working Papers. 1629.

Author: Susana Párraga Rodríguez.

Published in: SERIEs, Volume 14, Issue 1, March 2023

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The aggregate effects of government income transfer shocks - EU evidence (505 KB)

Abstract

This paper estimates the aggregate effect of government income transfer shocks for a sample of EU countries. The new measure of transfer shocks builds on a dataset by public finance experts of the European System of Central Banks (ESCB). The identification strategy consists of a narrative analysis of the old-age pension-related policy actions reported in the ESCB dataset. Increases in old-age pensions are found to have a positive impact on aggregate expenditure components and employment consistent with a multiplier effect of between 0 and 1.