Appraising fiscal reaction functions
AbstractWe estimate fiscal responses for an OECD panel, accounting for cross-country interactions, and also estimate the fiscal responses in a panel VAR. We find that governments have increased primary balances when facing higher government indebtedness, implying a Ricardian fiscal regime, while primary balances have improved to reduce government debt. These results hold for the single regression panel analysis and for the panel VAR.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 31 (2011)
Issue (Month): 4 ()
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fiscal regimes; Panel VAR; cross-sectional dependence;
Other versions of this item:
- H6 - Public Economics - - National Budget, Deficit, and Debt
- C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
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