We use a new approach to assess long-term fiscal developments. By analyzing the time-varying behaviour of the two components of government spendingandrevenue–responsivenessandpersistence–, a feature not captured by automatic stabilisers, we are able to infer about the sources of fiscal deterioration (improvement). Drawing on quarterly data, we estimate recursively these components within a system of government revenue and spending equations using a Three-Stage Least Squaremethod for eight EuropeanUnion countries plus the US. The results suggest that significant changes in the fiscal stance (including those related to the current crisis) are reflected in the estimates of persistence and responsiveness.
Afonso, A., Furceri, D. (2008). EMU Enlargement, Stabilization Cost and Automatic Stabilizers. JOURNAL OF INTERNATIONAL MONEY AND FINANCE, 2008.
EMU Enlargement, Stabilization Cost and Automatic Stabilizers
FURCERI, Davide
2008-01-01
Abstract
We use a new approach to assess long-term fiscal developments. By analyzing the time-varying behaviour of the two components of government spendingandrevenue–responsivenessandpersistence–, a feature not captured by automatic stabilisers, we are able to infer about the sources of fiscal deterioration (improvement). Drawing on quarterly data, we estimate recursively these components within a system of government revenue and spending equations using a Three-Stage Least Squaremethod for eight EuropeanUnion countries plus the US. The results suggest that significant changes in the fiscal stance (including those related to the current crisis) are reflected in the estimates of persistence and responsiveness.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.