Real-time determinants of fiscal policies in the euro area

Golinelli, Roberto; Momigliano, Sandro

doi:10.1016/j.jpolmod.2006.08.001

Cited by 169 publications

(49 citation statements)

References 15 publications

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“…This pattern is observed in the ten member states of the EMU included in our research. This is in line with most studies, which do not support a pro-cyclical bias after the introduction of fiscal constraints for EU countries (Turrini, 2008;Galí & Perotti 2003;Annet 2006;Golinelli & Momigliano 2006, although some studies provide evidence of procyclical fiscal behaviour in developing countries (Alesina and Tabellini (2005), Talvi and Vegh (2005), Manasse (2006)). These results are confirmed by a comparison of the averages before and after entry to the EMU for the whole euro area.…”

Section: Resultssupporting

confidence: 90%

“…Hence, fiscal policy tends to be more expansive in downswings than restrictive in upswings in economic activity. Similar conclusions are reported by the European Commission (2006) and Golinelli and Momigliano (2006) that the response of fiscal authorities to cyclical conditions in the economy depends on whether good or bad times are prevailing. In sum, the analysis seems to support the advocated hypothesis that a pro-cyclical bias was quite common fiscal behaviour for the euro area in the 1995-2010 period.…”

Section: Notesupporting

confidence: 86%

“…Indeed, in a phase of weak economic growth or even recession appropriate measures would be to cut taxes or increase spending. In contrast, when the economy is in a phase of prosperity, restrictive measures would be an appropriate tool to dampen the economy, such as an increase in the tax rate or cutting government expenditures (Cimadomo 2005) Over the last decade, a large body of literature has analyzed the characteristics of the fiscal behaviour of countries in the EMU period (Holm-Hadulla et al 2010;Turrini, 2008;Galí & Perotti, 2003;Annet, 2006;Golinelli & Momigliano 2006. We are particularly interested in examining the cyclical behaviour of fiscal policy.…”

Section: Literature Reviewmentioning

confidence: 99%

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Fiscal Policy Stance in the European Union: The Impact of the Euro

Mencinger

Aristovnik

2013

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In the recent years there has been an intense discussion whether the actual behaviour of fiscal authorities is consistent with cyclical stabilization objectives. The question of the appropriate fiscal policy is gaining recognition especially for the countries of the euro area after entering the European Monetary Union (EMU). Therefore, the aim of this paper is to evaluate the activity of the fiscal policy before and after the entrance to the euro zone for each individual EMU country in 1995individual EMU country in -2010 For this purpose we will use the cyclical adjusted balance, which is the common tool used to estimate fiscal policy stance. The analysis of the cyclically adjusted balance gives an additional insight into the former activity arrangements of the fiscal policy, which contributes to gauge the ex-post estimation of the fiscal policy. On this base we can determine the causes of general government budgets imbalance in the past. Despite this fact, we should be aware of some caveats in the assessment of cyclical adjusted balance, which appear due the inconsistency in measurement of output gap and potential GDP growth. To evaluate pro-cyclical or countercyclical fiscal policy stance we compare the dynamic evaluation of the cyclically adjusted balance and output gap. Namely, changes of the cyclically adjusted balance in consecutive years indicate the orientation of fiscal policy, i.e. the fiscal impulse. By comparing the change in the cyclically adjusted balance and output gap between individual years, which indicates fluctuations in the economic cycle, it is possible to assess the orientation of fiscal policy, i.e. the fiscal position. The fiscal policy can be considered as countercyclical if it is expansive in the situation of negative output gap and restrictive in the situation, when the actual growth of GDP is above its potential rate. On the other hand, fiscal policy is characterized to be pro-cyclical if in the situation of negative output gap the government uses restrictive fiscal instruments and when the fiscal policy reacts expansionary in the situation of positive output gap, where the actual output exceeds the estimated potential GDP.In the empirical analysis we evaluate the fiscal policy stance for each country of the euro area. In the assessment of government behaviour we cover 14 countries in the [1995][1996][1997][1998][1999][2000][2001][2002][2003][2004][2005][2006][2007][2008][2009][2010] IntroductionIn the 20th century many industrial countries began to record relatively high public deficits, causing further increases in public debt and therefore a deterioration of their fiscal positions. In particular, public expenditures exceeded government revenues in most countries, which had an overall impact on the growth of public debt (Baldwin & Wyplosz, 2009). As a consequence, the need to introduce fiscal rules came to the forefront of political activity, which would constrain public expenditure and consolidate the fiscal stance in the country.The Maastricht Treaty, signed by members of the ...

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Section: Resultssupporting

confidence: 90%

Section: Notesupporting

confidence: 86%

Section: Literature Reviewmentioning

confidence: 99%

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Fiscal Policy Stance in the European Union: The Impact of the Euro

Mencinger

Aristovnik

2013

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“…De nombreuses communes ont simultanément adapté leur budget, revu leurs priorités et réduit leurs dépenses afin de contenir les déficits (Guidoum et al, 2010). Différentes variables expliquent les choix politiques, comme l'ampleur perçue de la crise, la marge de manoeuvre et la capacité d'action, ou les préférences culturelles et politiques (Golinelli et Momigliano 2006, Imbeau & Tellier 2004, Krishnakumar et al 2010. Toutefois, à ce jour, l'influence de ces variables a peu été testée au niveau local.…”

Section: Cadre Conceptuel Et Aperçu De La Littérature Existanteunclassified

Gérer les crises — Comment les gouvernements locaux ont-ils réagi à la crise financière de 2008 et comment expliquer les différences ? Le cas des communes suisses

Ladner¹,

Soguel²

2015

Revue Internationale Des Sciences Administratives

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Les communes suisses sont largement souveraines pour financer leurs activités. Leurs ressources proviennent avant tout de l’impôt sur le revenu et de l’impôt foncier prélevés auprès des ménages et des entreprises. Une crise, comme celle de 2008, qui touche la sphère financière et l’économie en général risque d’avoir des répercussions directes sur les budgets locaux. Dans le présent article, nous examinons la manière dont les communes perçoivent ce risque et y réagissent. Dans une enquête menée à l’échelle nationale fin 2009 dans les 2596 communes suisses, nous avons demandé aux secrétaires municipaux quelles mesures avaient été prises face aux pertes fiscales attendues et à la hausse possible des dépenses sociales suite à la crise de 2008. Des mesures keynésiennes ont-elles été prises, en augmentant les dépenses et en acceptant des déficits plus importants, ou y a-t-il eu tentative de limiter les déficits par des mesures d’austérité, notamment en restreignant les investissements prévus ? Nos résultats indiquent que quelques communes seulement (essentiellement les plus grandes) s’attendaient à être durement touchées par la crise. On n’observe cependant pas de tendance systématique et conforme à la théorie. Certes des mesures d’austérité ont été mises en place ou un déficit budgétaire a été provoqué, mais bon nombre de communes ont appliqué simultanément des mesures relevant des deux théories. L’impact perçu de la crise au niveau local et l’appartenance de la commune à la partie francophone du pays sont les principaux facteurs expliquant la réaction des communes et les raisons de cette réaction. La taille de la commune joue aussi un rôle. Mais l’influence du parti social-démocrate est négligeable. Le type de mesures que les communes sont susceptibles de prendre est plus difficile à expliquer. Cependant, plus une commune se sent touchée, plus elle s’orientera vers des mesures d’austérité. Remarques à l’intention des praticiens Comment réagir à une crise financière ? Voilà une question à laquelle il est difficile de répondre, tant d’un point de vue scientifique que d’un point de vue pratique lorsqu’il s’agit de procéder à un arbitrage entre les diverses options possibles. La présente contribution montre que les débats théoriques entre les mesures de soutien à l’économie au prix de déficits publics d’un côté et des mesures d’austérité budgétaire de l’autre ne correspondent guère à la réalité, du moins au niveau local. Les responsables politiques avisés réduisent les dépenses et investissent là où c’est nécessaire. Tel est l’enseignement apporté par le comportement des communes suisses au lendemain de la crise de 2008.

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“…Empirical studies find evidence for political cycles in the surplus on a panel of EU countries (Golinelli and Momigliano, 2006;Hallerberg and Strauch, 2003). For…”

mentioning

confidence: 99%

Fiscal regime shifts in Portugal

2010

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Abstract:We estimate changes in fiscal policy regimes in Portugal with a Markov Switching regression of fiscal policy rules for the period 1978-2007, using a new dataset of fiscal quarterly series. We find evidence of a deficit bias, while repeated reversals of taxes making the budget procyclical. Economic booms have typically been used to relax tax pressure, especially during elections. One-off measures have been preferred over structural ones to contain the deficit during economic crises. The EU fiscal rules prompted temporary consolidation, but did not permanently change the budgeting process.

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Real-time determinants of fiscal policies in the euro area

Cited by 169 publications

References 15 publications

Fiscal Policy Stance in the European Union: The Impact of the Euro

Fiscal Policy Stance in the European Union: The Impact of the Euro

Gérer les crises — Comment les gouvernements locaux ont-ils réagi à la crise financière de 2008 et comment expliquer les différences ? Le cas des communes suisses

Fiscal regime shifts in Portugal

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