6533b836fe1ef96bd12a08f6

RESEARCH PRODUCT

Assessing long-term fiscal developments : a new approach

Luca AgnelloLuca AgnelloDavide FurceriDavide FurceriRicardo M. SousaRicardo M. SousaAntónio AfonsoAntónio Afonso

subject

MacroeconomicsEconomics and Econometricsjel:E62Fiscal deterioration Fiscal SustainabilitySocial SciencesFinanzpolitikFiscal SustainabilityFiscal deteriorationFiscal DeteriorationÖffentlicher HaushaltPolitischer Konjunkturzyklus0502 economics and businessFiscal Deterioration fiscal sustainabilityddc:330EconomicsRevenuemedia_common.cataloged_instance050207 economicsEuropean unionH50Dezentralisierung050205 econometrics media_commonGovernment spendingFiscalFiscal Deterioration Fiscal Sustainability.05 social sciencesSettore SECS-P/02 Politica Economicajel:H50Fiscal sustainabilityTerm (time)Government revenuePanelEU-StaatenFiscal sustainabilityE62Öffentliche AusgabenFinance

description

We use a new approach to assess long-term fiscal developments. By analyzing the time-varying behaviour of the two components of government spending and revenue – responsiveness and persistence–, 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 Square method for eight European Union 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.

yearjournalcountryeditionlanguage
2011-02-01
https://hdl.handle.net/10400.5/2157