Fiscal Policy in Real Time

Cyclical asymmetry in fiscal variables in the EU

“…The informational problems associated with the analysis of policy rules have been thoroughly analysed in the context of monetary policy (see, e.g., Orphanides 2001), but have received much less attention with reference to fiscal policy. For an analysis of fiscal policy reaction functions using real-time indicators, see Forni and Momigliano (2005), Momigliano (2006, 2008), Cimadomo (2007), Giuliodori and Beetsma (2008). Note that once we allow coefficients f and h to be different from 1 and move from Eq.…”

Fiscal behaviours in EMU countries: A dynamic approach

“…The two specifications would be equivalent if we included the lagged level of the dependent variable among regressors (Golinelli and Momigliano, 2006). Moreover, the explanatory power of the model and the statistical significance of the coefficient of the lagged CAPB are artificially inflated by the component attributable to inertia (Cimadomo, 2012). Therefore, the change in the CAPB better describes fiscal discretion.…”

“…They show that European countries improved their fiscal stance after the introduction of the EMU, while the cyclical conduct of fiscal policy deteriorated after the launch of the euro (e.g. Cimadomo, 2012;Bénétrix and Lane, 2013). This fiscal release can be illustrated by the implementation of the Excessive Deficit Procedure (EDP).…”

“…Nevertheless, revised data might be different from the data available in ''real-time'' to policymakers at the time of budgeting. As a result, there might be differences between discretionary fiscal measures planned in the past and ex-post observations for the same years(Cimadomo, 2012).…”

Fiscal policy in Central and Eastern Europe with real time data: cyclicality, inertia and the role of EU accession

“…For Western Europe, papers which compare fiscal policy reaction functions using ex post and real time data demonstrate that data vintage does matter (Forni and Momigliano, 2004;Golinelli and Momigliano, 2006;Bernoth et al, 2008;Cimadomo, 2012). They find discretionary fiscal policy tends to look acyclical based on ex post data, but counter-cyclical when real time data is used.…”