0000000000518913
AUTHOR
Juan Varela
The effects of budget deficit on national saving in the OECD
Abstract In this paper, we estimate a structural VAR using a panel of OECD countries, which includes national saving and budget deficit, both as the ratio to GDP, to test the Ricardian Equivalence hypothesis. In this framework, we separate saving and deficit movements into two types of shocks, associated with structural parameters of these economies. Our results suggest that Ricardian Equivalence did not work in our sample of OECD countries, since private saving compensated only a small fraction budget deficit. This supports the interpretation that the large budget deficits have been a very important factor behind the significant increase in real interest rates in the eighties and early nin…
Fiscal flows in Europe: The redistributive effects of the EU budget
Fiscal Flows in Europe: The Redistributive Effects of the EU Budget. — In this paper we analyze the redistributive effects of the EU budget among European countries, exploring the relationship between income and fiscal flows, both in per capita terms. Using a new data set on EU budgets from 1986 to 1998, we find that the EU budget has a redistributive effect, though only on its expenditure side. The most redistributive expenditure category is the Regional Fund, followed by the Social Fund and by the guarantee section of the EAGGF. All of them have become increasingly redistributive in time. Total budgetary revenues show only proportionality with income. As regards the net financial balance,…