《多边经济合作与国际财政政策的传递Giancarlo Corsetti 》.pdf

Multilateral economic cooperation and the international transmission of fiscal policy∗ Giancarlo Corsetti Gernot J. M¨uller Cambridge University and CEPR University of Bonn and CEPR December 15, 2011 Abstract During the global financial crisis 2007–2009 fiscal policy was widely used as a stabilization tool. Policymakers allowed a large build-up of public debt resulting from both automatic and discretionary expansionary measures. At the same time, calls for policy coordination stressed that international spillovers of fiscal policy might be sizeable. We reconsider the case for fiscal coor- dination by providing new evidence on the cross-border effects of discretionary fiscal measures. We rely on a vector autoregression model as well as on a quantitative business cycle model. We find that i) large spillover effects cannot be ruled out and, in contrast to conventional wisdom, ii) financial factors rather than trade flows lie at the heart of the international transmission mech- anism. We discuss the implications of these results for policy coordination when markets price sovereign default risk, and put pressure on governments for implementing budget consolidation measures. Keywords: Fiscal policy coordination, spillovers effects, Government spending shocks, financial crisis JEL-Codes: F42,E62 ∗Paper prepared for the conference “Globalization in an Age of Crisis: Multilateral Economic Cooperation in the Twenty-First Century” organized by the NBER and the Bank of England. We thank Alan Taylor and our discus- sants Martin Feldstein and