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Business cycle accounting for the German fiscal stimulus program during the Great Recession

  • We take the neoclassical perspective and apply the business cycle accounting method as proposed by Chari, Kehoe, and McGrattan (2007, Econometrica) for the Great Re- cession and the associated stimulus program in Germany 2008-2009. We include wedges to the variables government consumption, durables, investment, labor, net ex- ports, and efficiency. The results suggest: The crisis was mainly driven by the efficiency wedge, followed by the net exports and the investment wedge. The government con- sumption wedge and in particular the durables wedge acted counter-cyclical. We at- tribute the latter to an internationally incomparably large cash for clunkers program and conclude that this subsidy on durable goods was more effective than pure gov- ernment consumption. We introduce a strategy for likelihood maximization, which reliably and quickly locates the maximum; enables a detailed evaluation of the likelihood function and allows large robustness checks.

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Metadaten
Author:Daniel FehrleGND, Johannes Huber
URN:urn:nbn:de:bvb:384-opus4-836629
Frontdoor URLhttps://opus.bibliothek.uni-augsburg.de/opus4/83662
URL:http://www.bgpe.de/texte/DP/197_Fehrle_Huber.pdf
Publisher:Friedrich-Alexander-Universität Erlangen-Nürnberg
Place of publication:Nürnberg
Type:Working Paper
Language:English
Year of first Publication:2020
Publishing Institution:Universität Augsburg
Release Date:2021/02/22
Tag:JEL: C32, E20, E32, H12, H31
Pagenumber:43
Series:BGPE Discussion Paper ; 197
Institutes:Wirtschaftswissenschaftliche Fakultät
Wirtschaftswissenschaftliche Fakultät / Institut für Volkswirtschaftslehre
Wirtschaftswissenschaftliche Fakultät / Institut für Volkswirtschaftslehre / Lehrstuhl für Empirische Makroökonomik (Maußner)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Licence (German):Deutsches Urheberrecht