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Fiscal consolidations in the Central and Eastern European countries

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  • Afonso, António
  • Nickel, Christiane
  • Rother, Philipp

Abstract

We study fiscal consolidations in the Central and Eastern European countries and what determines the probability of their success. We define consolidation events as substantive improvements in fiscal balances adjusting for the impact of cyclical effects. We use Logit models for the period 1991–2003 to assess the determinants of the success of a fiscal adjustment. The results seem to suggest that for these countries expenditure based consolidations have tended to be more successful. By contrast, revenue based consolidations have a tendency to be less successful. JEL Classification: C25, E62, H62

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Bibliographic Info

Paper provided by European Central Bank in its series Working Paper Series with number 0473.

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Date of creation: Apr 2005
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Handle: RePEc:ecb:ecbwps:20050473

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Keywords: central and eastern Europe; fiscal episodes; Fiscal Policy; Logit models;

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References

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Citations

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Cited by:
  1. Maria Neicheva, 2006. "Non-Keynesian Effects of Government Expenditure on Output in Bulgaria: An HP Filter Approach," Post-Communist Economies, Taylor & Francis Journals, vol. 18(1), pages 1-12.
  2. António Afonso & João Tovar-Valles, 2011. "Measuring the Success of Fiscal Consolidations," Working Papers Department of Economics 2011/22, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  3. Staehr, Karsten, 2008. "Fiscal policies and business cycles in an enlarged euro area," Economic Systems, Elsevier, vol. 32(1), pages 46-69, March.
  4. Ayala, Astrid & Blazsek, Szabolcs, 2013. "Structural breaks in public finances in Central and Eastern European countries," Economic Systems, Elsevier, vol. 37(1), pages 45-60.
  5. Philipp Paulus, 2006. "The final blow to the Stability Pact? EMU enlargement and government debt," Otto-Wolff-Institut Discussion Paper Series 03/2006, Otto-Wolff-Institut für Wirtschaftsordnung, Köln, Deutschland.
  6. Gomes, Orlando, 2007. "On the stability of endogenous growth models: an evaluation of the agents’ response to output fluctuations," MPRA Paper 2891, University Library of Munich, Germany.
  7. Maria Neycheva, 2007. "Impact of Fiscal Policy on the Cumulative Production in the Bulgarian Economy," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 82-101.
  8. Fatih Ozatay, 2008. "Expansionary Fiscal Consolidations: New Evidence from Turkey," Working Papers 0805, TOBB University of Economics and Technology, Department of Economics.
  9. Juan Carlos Cuestas & Karsten Steahr, 2011. "Fiscal shocks and budget balance persistence in the EU countries from Central and Eastern Europe," Working Papers 2011014, The University of Sheffield, Department of Economics, revised May 2011.
  10. Jean-Marc Figuet & Nikolay Nenovsky, 2006. "Convergence and shocks in the road to EU: Empirical investigations for Bulgaria and Romania," William Davidson Institute Working Papers Series wp810, William Davidson Institute at the University of Michigan.
  11. Irina BILAN & Florin OPREA, 2012. "EU fiscal consolidation strategies in times of crisis – comparative approaches," Anale. Seria Stiinte Economice. Timisoara, Faculty of Economics, Tibiscus University in Timisoara, vol. 0, pages 887-894, May.
  12. António Afonso & João Tovar Jalles, 2011. "Assessing fiscal episodes," Working Papers Department of Economics 2011/15, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  13. Neicheva, Maria, 2007. "Non-Keynesian effects of Government Spending: Some implications for the Stability and Growth Pact," MPRA Paper 5277, University Library of Munich, Germany.
  14. Weonho Yang & Jan Fidrmuc & Sugata Ghosh, 2013. "Macroeconomic Effects of Fiscal Adjustment: A Tale of two Approaches," CESifo Working Paper Series 4401, CESifo Group Munich.
  15. Borys, Paweł & Ciżkowicz, Piotr & Rzońca, Andrzej, 2013. "Panel data evidence on effects of fiscal impulses in the EU New Member States," MPRA Paper 48243, University Library of Munich, Germany.
  16. Borys, Paweł & Ciżkowicz, Piotr & Rzońca, Andrzej, 2011. "Panel data evidence on non-Keynesian efects of fiscal policy in the EU New Member," MPRA Paper 32696, University Library of Munich, Germany.

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