Aging and Regional Fiscal Multipliers in the Euro Area
-
Series
-
Speaker
-
FieldMacroeconomics
-
LocationErasmus University Rotterdam, Campus Woudestein, Langeveld 2.14
Rotterdam -
Date and time
October 20, 2025
11:30 - 12:30
Abstract
Using a comprehensive Euro Area regional dataset and exploiting exogenous variation in government spending, this paper finds that aging significantly enhances fiscal policy effectiveness. On average, a 10-year increase in median age raises the regional fiscal multiplier by 50%. This impact is heterogeneous and mediated by the institutional and structural context, specifically unemployment benefit generosity and the degree of nominal rigidity. Regions with low benefits or low nominal rigidity exhibit an attenuated or negative effect of aging on the fiscal multiplier. Joint paper with Yao Chen and Felix Ward.