Abstract

PERROTINI HERNANDEZ, Ignacio  and  LANDA DIAZ, Heri Óscar. Endogenous Growth and Aggregate Demand: Panel Analysis for European Monetary Union. Econ: teor. práct [online]. 2015, n.spe3, pp.83-113. ISSN 2448-7481.

The paper is mainly aimed at computing the elasticity of the natural growth rate of output (gn ) vis-à-vis fluctuations in aggregate demand for both the European Monetary Union as a whole and a sample of 18 Eurozone's countries. Using data for the period 1980-2012, estimates are drawn from a Standard Error Correction Panel model. The gn is shown to be elastic vis-à-vis the actual growth rate of output across the board, albeit elasticity coefficients vary across countries. Our empirical results shed light for assessing the relative merits of the austerity and internal devaluation policies recommended by the ECB, EC, IMF and financial markets to Eurozone crisis-ridden countries.

Keywords : central bank; endogenous growth; Euro; fiscal policy; models with panel data; monetary policy.

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