Search results for "jel:H6"

Does politics matter in the conduct of fiscal policy? Political determinants of the fiscal sustainability: Evidence from seven individual Central and…

2007

This paper aims at assessing the fiscal sustainability and its political determinants in seven Central and Eastern European Countries (CEEC), namely Estonia, Latvia, Lithuania, Poland, Slovenia, Slovakia and the Czech Republic. First, using the recent sustainability approach of Bohn (1998) based on fiscal reaction function, econometric findings using Ordinary Least Squares (OLS) reveal a positive response of the primary surplus to changes in debt in several countries. In other words, fiscal policy is sustainable in Baltic countries, Slovenia and Slovakia, but not in Poland and in the Czech Republic. Second, by introducing political dummy variables, we test the electoral budget cycle and the…

Asymmetric decentralisation, economic cycle, regional and local government’s borrowing in Spain

2014

This paper investigates the evolution of sub-central government borrowing in Spain over the period 1996–2011. The arguments and figures provided show that the intense process of political and fiscal decentralisation that took place over the 1990s and 2000s did not lead to higher debt ratios in terms of GDP at these tiers of government until 2007. Although a kind of overspending bias was in effect until the late 2000s, the paper shows that the evolution of GDP and tax revenues provided regional and local governments with enough resources to vigorously pursue their devolved public policy responsibilities and still keep their debt ratios under control. However, since 2008, when the world finan…

Deficit sustainability and inflation in EMU: An analysis from the Fiscal Theory of the Price Level

2007

Price determination theory typically focuses on the role of monetary policy, while the role of fiscal policy is usually neglected. From a different point of view, the Fiscal Theory of the Price Level takes into account monetary and fiscal policy interactions and assumes that fiscal policy may determine the price level, even if monetary authorities pursue an inflation targeting strategy. In this paper we try to test empirically whether the time path of the government budget in EMU countries would have affected price level determination. Our results point to the sustainability of fiscal policy in all the EMU countries but Finland, although no firm conclusions can be drawn about the prevalence…

Searching for Threshold Effects in the Evolution of Budget Deficits: An Application to the Spanish Case

2004

Abstract In this paper, we use recent developments on threshold autoregressive (TAR) models that allow us to derive endogenously threshold effects in the evolution of the Spanish budget deficit. Specifically, a mean-reverting dynamic behaviour of the budget deficit should be expected once such threshold is reached.

Can fiscal decentralization alleviate government consumption volatility?

2016

We analyse how fiscal decentralization affects the volatility of government consumption extending the existing literature that mainly deals with the effects of the former on government size. Using data for 97 developed and developing countries from 1971 to 2010, we find that a higher degree of fiscal decentralization leads to lower government consumption volatility. This result holds for the sub-sample of advanced economies, while it is not confirmed for those less-developed. This mechanism seems to work mainly through a lower volatility of the non-discretionary spending, which typically belongs to the central government’s policy. We also confirm existing findings according to which country…

Measuring the Regional Incidence of Taxes and Public Expenditure: The Available Methodology and its Limitations

2014

This article reviews the basic methodology used to estimate the regional incidence of taxes and public expenditure, which we call the fiscal incidence approach, and compares it with the cash flow approach, which measures tax revenues and expenditures in terms of the associated monetary cash flows. In this context, it considers critically the particular version of the cash flow approach used in Spain. The article also looks at the different ways in which economists have tried to decompose fiscal balances into a structural or distributive component and a cyclical component, and critically reviews present practices.

The impact of budget deficit on the economic development of Romania

2012

This paper empirically analyzes the impact of budget deficit on the economic development of Romania. Using the OLS estimates for quarterly series for the period from 2001 to 2011, the results of the estimates prove that there is an indirect relationship between budget deficit and economic growth of Romania. According to the best statistically significant model from the three different model tested, we reached the result that one percent rise of budget deficit gives a 1.36 percent fall in real GDP. This result sustains the neoclassical hypothesis and is against the Keynesist hypothesis or the Ricardian equivalence.

Considerations regarding the Romanian fiscal and budgetary reform in accordance with the E.U. requirements

2006

The paper starts with the role of the Romanian fiscal and budgetary reform in the development and economical growth and has as purpose to emphasize the essential problems: the harmonization and fiscal coordination from the E.U. perspective; the Romanian fiscal and budgetary perspectives for period 2007-2009.

Presentación del monográfico: "Fondos estructurales de la Unión Europea: balance, reforma y perspectivas"

2000