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Monetary developments and expansionary fiscal consolidations : evidence from the EMU
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Orientador(es)
Resumo(s)
This paper provides new insights about the existence of expansionary fiscal consolidations in the Economic and Monetary Union, using annual panel data for 14 European Union countries over the period 1970-2012. Different measures for assessing fiscal consolidations based on the changes in the cyclically adjusted primary balance were calculated. A similar ad-hoc approach was used to compute monetary expansions, in order to include them in the assessment of non-Keynesian effects for different budgetary components. Panel Fixed Effects estimations for private consumption show that, in some cases, when fiscal consolidations are coupled with monetary expansions, the traditional Keynesian signals are reversed in the cases of general government final consumption expenditure, social transfers and taxes. Keynesian effects prevail when fiscal consolidations are not matched by monetary easing. Panel probit estimations suggest that longer and expenditure-based consolidations contribute positively for its success, whilst the opposite is the case for tax-based ones.
Descrição
Palavras-chave
Fiscal Consolidation Monetary Expansion Non-Keynesian Effects Panel Data Probit
Contexto Educativo
Citação
Afonso, António e Luís Martins .2014. "Monetary developments and expansionary fiscal consolidations : evidence from the EMU". Instituto Superior de Economia e Gestão. DE Working papers nº 12-2014/DE/UECE
Editora
ISEG – Departamento de Economia