Publication
Title
Discretion versus rule-based fiscal policy in new EU economies
Author
Abstract
This paper aims to evaluate fiscal policy as a macroeconomic stabilization tool in the new EU member countries using a vector autoregression (VAR) framework. The combined results of the analysis of impulse response functions and of the aggressiveness of fiscal discretion suggest that: 1. Shocks to government expenditures and revenues yield rather minor stimulating effects on output. 2. Periods with higher output growth tend to be linked with more loosened systematic policy levels. 3. There is evidence that higher output volatility is associated with the aggressive use of fiscal policy, whilst fiscal discretion does not seem to stimulate lasting output growth. Overall, this evidence together with the increased debt financing risks of these emerging economies favours the use of rules-based fiscal policy rather than (aggressive) fiscal discretion.
Language
English
Source (series)
Research paper / University of Antwerp, Faculty of Applied Economics ; 2011:013
Publication
Antwerp : UA, 2011
Volume/pages
24 p.
Full text (open access)
UAntwerpen
Faculty/Department
Research group
Publication type
Subject
Affiliation
Publications with a UAntwerp address
External links
Record
Identification
Creation 04.01.2012
Last edited 04.09.2013
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