Advanced Search
MyIDEAS: Login to save this paper or follow this series

Budgetary Policies in Europe on the Eve of Monetary Union

Contents:

Author Info

  • de Menil, G.

Abstract

This paper presents an econometric analysis of 65 episodes of fiscal adjustment in the OECD from 1960 through 1992. The episodes are the ones that Perotti (1995) has identified as entailing major reductions of previous deficits. The paper estimates the effect on the growth of GDP and of consumption from t+4 of reductions in government expenditures, on the one hand, and increases in taxes, on the other, at time t, t being the date of the episode. The coefficients of the reduced forms estimated may be interpreted as multipliers, and compared with Keynesian hypotheses and non-Keynesian hypotheses. The principal conclusion is that the result depends critically on the breadth and development of financial markets. The episodes are divided into times and countries when credit was constrained, and times and places when it appears to have been less constrained, and times and places when it appears to have been less constrained. (A measure of the extent of household housing mortgages is used for this purpose). The finding is that the multipliers have Keynesian signs when credit was constrained, but become insignificantly different from zero when it was less so. The implication is that classical "crowding out" forces offset the Keynesian dynamic when credit is relatively unconstrained. The article concludes with an application of these results to the context of Monetary Union.

Download Info

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Bibliographic Info

Paper provided by DELTA (Ecole normale supérieure) in its series DELTA Working Papers with number 97-17.

as in new window
Length: 18 pages
Date of creation: 1997
Date of revision:
Handle: RePEc:del:abcdef:97-17

Contact details of provider:
Postal: 48 boulevard Jourdan - 75014 Paris
Phone: 01 43 13 63 00
Fax: 01 43 13 63 10
Email:
Web page: http://www.delta.ens.fr/
More information through EDIRC

Related research

Keywords: MONETARY AREAS ; EUROPE ; BUDGET ; LIQUIDITY;

Find related papers by JEL classification:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:del:abcdef:97-17. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.