Arbeitspapier
Exit strategies
We study alternative scenarios for exiting the post-crisis fiscal and monetary accommodation using the model of Angeloni and Faia (2010), that combines a standard DSGE framework with a fragile banking sector, suitably modified and calibrated for the euro area. Credibly announced and fast fiscal consolidations dominate - based on simple criteria - alternative strategies incorporating various degrees of gradualism and surprise. The fiscal adjustment should be based on spending cuts or else be relatively skewed towards consumption taxes. The phasing out of monetary accommodation should be simultaneous or slightly delayed. We also find that, contrary to widespread belief, Basel III may well have an expansionary macroeconomic effect.
- Language
-
Englisch
- Bibliographic citation
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Series: CFS Working Paper ; No. 2010/25
- Classification
-
Wirtschaft
Financial Crises
Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
Crisis Management
- Subject
-
Exit Strategies
Debt Consolidation
Fiscal Policy
Monetary Policy
Capital Requirements
Bank Runs
- Event
-
Geistige Schöpfung
- (who)
-
Angeloni, Ignazio
Faia, Ester
Winkler, Roland C.
- Event
-
Veröffentlichung
- (who)
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Goethe University Frankfurt, Center for Financial Studies (CFS)
- (where)
-
Frankfurt a. M.
- (when)
-
2010
- Handle
- URN
-
urn:nbn:de:hebis:30-87138
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Angeloni, Ignazio
- Faia, Ester
- Winkler, Roland C.
- Goethe University Frankfurt, Center for Financial Studies (CFS)
Time of origin
- 2010
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