Essays in Applied Macroeconomics

Abstract

This dissertation consists of three independent research studies. All of them use empirical databases and methods to shed light on important topics. The first chapter provides a full picture of the effects of government spending in the Eurozone economy, including transmission mechanisms, regional spillovers, sectoral heterogeneity, and state dependencies. The second chapter focuses on the political consequences of fiscal austerity by estimating its impact on the vote share of the extreme right and left parties, political fragmentation, and trust in the incumbent government. The third chapter uses micro-level data to characterize earnings dynamics in Germany and describes the role of public and private insurance in protecting German households against individual income shocks.