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The dynamic behaviour of budget components and output
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Autores
Orientador(es)
Resumo(s)
The main focus of this paper is the relation between the cyclical components of total revenues and expenditures and the budget
balance in France, Germany, Portugal, and Spain. We try to uncover past trends behind the development of public finances that
contribute to explaining the current stance of fiscal policy. The disaggregate analysis of fiscal policy in an SVAR that mixes long
and short-term constraints allows us to look into the transmission channels of fiscal policy and to derive a model-based indicator of
structural balance. The main conclusions are that fiscal slippages are mainly due to reversals in tax policies, which are unmatched
by expenditure adjustments. As a consequence, deficits rise when economic conditions worsen but cause a ‘ratcheting up’ in the
size of government in economic booms. The Stability and Growth Pact has not eradicated these procyclical policies. Bad policies in
good times also contribute to aggregate macroeconomic instability.
Descrição
Palavras-chave
Fiscal Indicator Structural Balance Output Gap SGP EMU SVAR Short and Long-Term Restrictions
Contexto Educativo
Citação
Afonso, António and Peter Claeys.(2008). "The dynamic behaviour of budget components and output" . Economic Modelling, Vol. 25, No.1: pp. 93-117.
Editora
Elsevier