Fiscal policy in Europe: The importance of making it predictable

Cavallari, Lilia; Romano, Simone

doi:10.1016/j.econmod.2016.09.008

Cited by 28 publications

(10 citation statements)

References 34 publications

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“…Researchers using mainly Structural Vector Autoregression (SVAR) models, find that positive shocks on government spending stimulate output at least in the short run (e.g., Blanchard and Perotti 2002;Cimadomo and Bénassy-Quéré 2012;Giordano et al 2007). Moreover, there is evidence that positive shocks on taxes suppress output (e.g., Blanchard and Perotti 2002;Alesina et al 2012;Cimadomo and Bénassy-Quéré 2012;Cavallari and Romano 2017). Contrary to the predictions of neoclassical models where consumption is expected to fall due to negative wealth effects, positive effects of government spending on consumption are found (e.g., Blanchard and Perotti 2002;Fatas and Mihov 2001;Giordano et al 2007).…”

Section: Introductionmentioning

confidence: 99%

Size Effects of Fiscal Policy and Business Confidence in the Euro Area

Michail

Savva

Koursaros

2017

IJFS

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Abstract:In the aftermath of the European sovereign debt crisis (2009)(2010)(2011)(2012)(2013)(2014), the management of expectations has risen in importance. However, policy responses have emphasized the management of fiscal spending without examining the impact changes in the business confidence have on the economy. This paper uses a Factor-Augmented Vector Autoregressive specification, which allows for a larger information set covering both domestic and international developments, to measure the responses of five Euro Area economies to a one percent shock in government consumption and business confidence. The evidence suggests that even though the response to a government consumption shock is strong, a shock in expectations has an even greater effect. This points out to the fact that perceptions about the future and trust in the policymaker are much more important than previously considered. Thus, especially in (but not limited to) times of turbulence, or during efforts of stabilization and/or structural reforms, more emphasis should be placed on the overall credibility of the decisions, which could help to mitigate any potential adverse effects from the policies.

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Section: Introductionmentioning

confidence: 99%

Size Effects of Fiscal Policy and Business Confidence in the Euro Area

Michail

Savva

Koursaros

2017

IJFS

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“…Fiscal policy is often considered in the literature as one of the major factors for assessing the economic efficacy criteria, for promoting and developing certain industrial segments or activities, as well as for technological progress or changing the actual production paradigms [3][4][5]. Energy taxation shapes the industrial framework and consumption patterns that promote positive industrial changes and anticipate the ratio between the estimated opportunity cost and energy consumption.…”

Section: Introductionmentioning

confidence: 99%

A Cluster Design on the Influence of Energy Taxation in Shaping the New EU-28 Economic Paradigm

et al. 2017

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Environmental and energy taxation are essential components for designing global economic policies and they often contribute to achieving the sustainable economic development goals in contemporary economies. Starting from the analysis of certain elements such as the share of environmental, energy, transport and pollution taxation in GDP and using the Hierarchical Clustering methodology, the paper aims to identify economic models of behaviour and to understand the influence of energy taxation in designing an economic paradigm. In addition, another objective of the paper is to deepen the relationships that energy taxation has in designing certain economic models of behaviour and to group the EU-28 Member States based on the specified criteria. The research results confirm that at the EU-28 level could exist elements for achieving energy taxation convergence and that the states should promote a more accurate fiscal policy in order to improve the loss of competitivity caused by an inaccurate energy taxation.

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“…The researches make a hypothesis that the implementation of discretionary fiscal policy creates different expectations about the level of public debt and budget balance (Montes, Luna, 2018). However, it is defined that fiscal policy is predictable, and its consequences depend on the degree of its influence on the expectations (Cavallari, Romano, 2017).…”

Section: Approaches To the Formation Of Fiscal Policymentioning

confidence: 99%

Fiscal Policy and Institutional Budget Architectonics

Чугунов¹,

Makohon²,

Krykun³

2020

BJES

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The purpose of the article is to study the role of fiscal policy in the context of the development of institutional budget architectonics aimed at ensuring macroeconomic stability, boosting economic growth, strengthening human potential, improving public welfare and defining approaches to its formation in advanced and transition economies. Comparative and factor methods make it possible to cover the peculiarities of institutional environment of the formation of fiscal policy in EU countries and Ukraine in the context of the development of the institutional budget architectonics and to identify ways for its improvement. Methodology. Substantiation of the role of fiscal policy in terms of the development of institutional budget architectonics, determination of its strategic orientations are based on generalization and systematization of experience of advanced and transition economies. For this very reason, the authors analyse and assess the fiscal policy and define special aspects of the formation and implementation of its components in relevant countries. Results show that to increase the effectiveness of the fiscal policy, it is expedient to ensure its interrelation with other components of financial policy based on a combination of fiscal and motivation function. Effective institutional budget architectonics provides means for creating conditions for sustainable economic growth, achieving strategic goals of socio-economic development of the country. Significant tasks of the development of institutional budget architectonics are regulation of the ratio between direct and indirect tax revenues, the structure of budget expenditures in terms of functional, economic classifications, maintaining the budget gap and public debt at the level that contributes to the financial and economic stability of the country, taking into account economic cyclical nature. Practical implications. A feasible budget architectonics would facilitate the maintenance of macroeconomic stability and accelerate economic growth. It is expedient to carry out institutional changes of budget architectonics on the ground of dynamic interconnection of budget and macroeconomic indicators. Value/originality. Fiscal policy plays a significant part in the process of government regulation of socio-economic development of the country. Elaboration of fiscal policy approaches in the context of the development of institutional budget architectonics is an important prerequisite for improving the quality of budget planning, ensuring the strength, stability and dynamic balance of the budget system. It is advantageous to introduce adaptive institutional changes into the budget architectonics in order to accelerate economic growth. Therefore, the article covers the essence and role of institutional budget architectonics aimed at ensuring macroeconomic stability, accelerating economic growth, developing human potential, improving public welfare; it defines the approaches to its development in transition and advanced economies. The authors establish that effective f...

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Fiscal policy in Europe: The importance of making it predictable

Cited by 28 publications

References 34 publications

Size Effects of Fiscal Policy and Business Confidence in the Euro Area

Size Effects of Fiscal Policy and Business Confidence in the Euro Area

A Cluster Design on the Influence of Energy Taxation in Shaping the New EU-28 Economic Paradigm

Fiscal Policy and Institutional Budget Architectonics

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