Working Papers

Investment Tax Incentives and Their Big Time-to-Build Fiscal Multiplier (with D. Bermperoglou and Y. Deli)

Click here for the Online Appendix to the paper

Abstract: This paper studies how investment tax incentives stimulate output in an estimated medium-scale dynamic stochastic general equilibrium model. We find that the horizon following a positive shock to investment tax incentives is crucial. The shock is highly expansionary in the long run, with the relevant fiscal multiplier substantially exceeding 1, but this effect only becomes visible after two to three years. Anticipation does matter with output being adversely affected before the materialization of the shock yielding a fiscal multiplier above 1 in the long run.

Export Prices and Markups with a Common Currency: Empirical Evidence from Greek Exporting Firms and Euro Adoption (with K. Drivas and M. Katsimi)

(Click here for an older version entitled "The Single Currency Effect on Exports: Firm Heterogeneity, Markups and the Euro" jointly written by S. Kalyvitis, M. Katsimi, E. Pappa and B.J. Restrepo)

Abstract: We estimate the effect of euro adoption on prices using data on Greek exporters spanning over the period 1999-2007. The overall impact of the euro on the prices of exports was negligible, but it masks significant heterogeneity across firms with different levels of pre-euro productivity. Our benchmark estimates indicate that the prices set by initially high-productivity firms rose on average by 8.9%. Our evidence further shows that these firms also raised their markups after euro adoption, whereas less efficient firms lowered their markups.

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