Government Investment and the European Stability and Growth Pact

(joint with Vadym Lepetyuk)

Economic Perspectives, Federal Reserve Bank of Chicago, 2007, vol. 31, n.3, pp.33-43.

The code for this project is written in Matlab, except for a Stata code that pulls data from the Eurobarometer survey.

Main code for the baseline exercise: it loads the data for all countries, and calls the subroutines for each country and each choice of the depreciation rate: eu8.m
Main code for the Eurobarometer exercise: eu12.m
Subroutine that computes wedges for the case in which gross investment is excluded from the deficit count: hetprob.m
Same as above for net investment: hetprobnet.m

Files that contain demographic data needed as inputs:
Mortality by age: eu12mortality.txt
Population structure by age: eu12population.txt
Population growth: eu12popgrowth.txt
Baseline emigration rates: eu8migration.txt
Excel spreadsheet that contains emigration data sent to us by Anna Lööf at Eurostat (note: all other data were downloaded from the Eurostat web site or their publications): emigration.xls
Stata code that handles the Eurobarometer survey data: eu12migration.do
Note: the Eurobarometer data are not freely available, so we can not include them here. They can be downloaded from the archives mentioned here: http://www.gesis.org/en/data_service/eurobarometer/staff/archives.htm

The code for the U.S. states and federal government is slightly older, so it does not call the two subroutines at the same time.
Main code for the U.S. states and federal government for gross investment: multi.m
Subroutine that computes wedges for gross investment: hetprob.m
Main code for the U.S. states and federal government for net investment: multi.m
Subroutine that computes wedges for net investment: hetprobnet.m
The data needed to run the U.S. code can be downloaded from the page dedicated to the paper "Politics and Efficiency of Separating Capital and Ordinary Government Budgets"