Fiscal policy uncertainty and the business cycle: Time series evidence from Italy

Anzuini, Alessio; Rossi, Luca; Tommasino, Pietro

doi:10.1016/j.jmacro.2020.103238

Cited by 34 publications

(16 citation statements)

References 41 publications

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“…Anzuini et al [28] present discussion of the effects arising from fiscal policy uncertainty and estimate different outcomes of the same change in the government budget, depending on whether fiscal policy uncertainty is increasing or decreasing. Keynesian effects of expansionary fiscal policy prevail only if policy implementation decreases (or at least does not increase) uncertainty.…”

Section: Literature Review 21 Public Debt's Impact On Economic Growth and Fiscal Multipliermentioning

confidence: 99%

The Heterogeneous Public Debt–Growth Relationship: The Role of the Expenditure Multiplier

et al. 2021

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Currently countries are facing a new crisis caused by the COVID-19, which leads to the rise of government expenditures and additional borrowing. This situation highlights the importance of examine factors which determine the level of public debt that still sustains economic growth. A growing body of research supports the idea of a non-linear debt–growth relationship and estimates the threshold level above which debt becomes unsustainable and has a negative effect on output. The empirical evidence points out that there is no single sustainable debt threshold level that holds for all countries. This research complements scarce empirical evidence on the heterogeneous debt–growth relationship and provides some insights on the publicly available statistical indicators that might signal a relatively low/high expenditure multiplier and, at the same time, potentially unsustainable/sustainable growth stimulus through the use of borrowed funds. We test the hypothesis that the expenditure multiplier is shaping the impact of public debt on growth. Our empirical examination is based on panel data analysis in the groups of countries with expected relatively high and low expenditure multiplier. Research results show that a statistically significant negative marginal effect of debt on growth starts to manifest at a lower debt-to-GDP ratio when the expenditure multiplier is lower and vice-versa. The study shed some light on the sources of heterogeneity in a debt–growth relationship. We can conclude that countries with a high expenditure multiplier level can borrow more and sustain growth. In contrast, in countries with a lower expenditure multiplier, a relatively low debt level becomes unsustainable for growth.

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Section: Literature Review 21 Public Debt's Impact On Economic Growth and Fiscal Multipliermentioning

confidence: 99%

The Heterogeneous Public Debt–Growth Relationship: The Role of the Expenditure Multiplier

et al. 2021

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show abstract

“…In some works, Anzuini et al (2020) and Ardanaz et al (2020) note that one of the critical tasks of improving the public financial management system's efficiency is to develop new approaches to the management of uncertainty, which is a factor of macroeconomic fluctuations. Thus, it is highlighted that countries with a significant degree of political instability have a much higher tax burden and public debt (Rieth, 2017;Nakagawa et al, 2018).…”

Section: Literature Reviewmentioning

confidence: 99%

“…The integral coefficient of structural differences (Salai coefficient):http://dx.doi.org/10.21511/imfi.18(1).2021.05 one, this index also takes into account the number of groups.8. The integral index of difference of structures by Ryabtsev:…”

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confidence: 99%

Evaluation of state budget structural changes based on the coefficient method

Фролов

Bogacki

Shukairi

et al. 2021

Investment Management and Financial Innovations

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According to the current situation in the world economy connected with the coronavirus pandemic, it is difficult to predict GDP growth. Non-economic factors determine the rate of decline in economies of almost all countries. Accordingly, it is extremely difficult to ensure the stable functioning of financial systems. In this situation, the role of public finance, especially the state budget, significantly increases, given the peculiarities of the formation of different levels’ budgets. This research aims to evaluate state budget structural changes on the example of Ukraine. Based on the linear coefficient and the quadratic coefficient of absolute structural changes, the quadratic coefficient of relative structural changes, and integral coefficients of structural changes the authors analyzed the state of public finance in Ukraine since the formation of the state and local budgets and their optimal use to mitigate the effects of the pandemic on the economy can become one of the factors in maintaining financial stability and developing anti-crisis measures. The forecast values of the growth rate of budget revenues and expenditures confirm that the projected revenue gaps are significantly higher than the projected expenditure gaps. The cost structure of the state budget of Ukraine is characterized as a structure with a low level of differences. The Gatev and Ryabtsev coefficients demonstrate unidirectional dynamics. In contrast, Salai coefficient shows the opposite dynamics, which confirms a lack of stability in the cost structure. From 2008 to 2019, the chain rate of change has a significant variation range.

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“…A significant task to augment the public financial management system efficiency is developing new approaches to managing uncertainty, which is a significant factor in macroeconomic fluctuations (Anzuini et al, 2020;Aursland et al, 2020). It is particularly corroborated that countries with a significant political instability degree have a much higher level of tax burden and public debt (Rieth, 2017).…”

Section: Theoretical Basismentioning

confidence: 99%

Public finance management system in modern conditions

Chornovol

Tabenska

Tomniuk

et al. 2020

Investment Management and Financial Innovations

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The public finance management system is an important lever for equalizing financial and budgetary disproportions in the context of institutional changes. The paper aims to substantiate the directions of development of the public financial management system. Economic and statistical methods and correlation-regression analysis methods are used to determine the relationship between the GDP deflator and the share of revenues, expenditures, the general government budget deficit, and public debt in GDP, assessing the features of the public financial management system in Ukraine and EU countries. This study reveals that one of the main restraining factors in the public finance system development is a significant level of uncertainty in economic processes, which intensifies macroeconomic fluctuations, significant indicators of the share of public debt and budget deficit of the state administration sector pose risks to financial and economic stability; their potential negative impact on socio-economic processes is much more destructive than the pro-cyclical nature of fiscal policy. From this point of view, the public finance management system should be directed at optimizing financial and budgetary tools to prevent the growth of public debt and budget deficit in gross domestic product, which determines the importance of substantiating further development directions of the public financial management system. It is concluded that the mechanism of public financial management in recent years is quite rigid and restrictive, in the context of institutional change expands the tools of public financial management and increases its impact on socio-economic processes.

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Fiscal policy uncertainty and the business cycle: Time series evidence from Italy

Cited by 34 publications

References 41 publications

The Heterogeneous Public Debt–Growth Relationship: The Role of the Expenditure Multiplier

The Heterogeneous Public Debt–Growth Relationship: The Role of the Expenditure Multiplier

Evaluation of state budget structural changes based on the coefficient method

Public finance management system in modern conditions

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