FES International Research Seminar Series with professor Carlo Favero, University Of Bocconi, Italy

Our next seminar speaker is Carlo Favero, who is a Full Professor of Finance at Bocconi University. Carlo’s main research areas are financial economics, macroeconomics and applied econometrics. Specifically, he is an expert in the area of econometric modelling of bond and stock prices. He published widely in leading journals, including the Journal of Monetary Economics, Journal of Econometrics, AEJ: Economic Policy, Journal of International Economics and Economic Journal.

Please note that this is a joint FES-ICEF seminar.

Speaker: Carlo Favero, University of Bocconi

Title: Is it the "How" or the "When" that Matters in Fiscal Adjustments? (joint with Alberto Alesina, Gualtiero Azzalini, Francesco Giavazzi and Armando Miano)

Abstract: Using data from 16 OECD countries from 1981 to 2014 we specify a model that determines the output effect of fiscal adjustments as a function of the composition of the adjustment and the state of the cycle. We find that both the "how" and the "when" matter, but the heterogeneity related to the composition is more robust across different specifications. Adjustments based upon spending cuts are consistently much less costly than those based upon tax increases. Our results are not explained by different reactions of monetary policy. However, when the domestic central bank can set interest rates - that is outside of a currency union - it appears to be able to dampen the recessionary effects of tax-based consolidations implemented during a recession.

Date: September 18, 2017

Time: 13:40-15:00

Venue: Shabolovka campus, room 3211

FES Seminars webpage: https://economics.hse.ru/en/seminars/ 

For external participants: to order the pass, please contact avolchina@hse.ru