Fiscal Policy Coordination in OECD Countries
AbstractThis paper deals with fiscal policy coordination. In specifically it focuses on the question of how fiscal policy can be coordinated in the world where countries differ a lot in terms of cyclical behaviour and importance of country-specific shocks and well as the fiscal policy multipliers. To answer this question, we compute cyclical sensitivity measures for different components of the deficit variable and the discretionary measure of fiscal policy for all OECD countries for the period 1960-1996. For that purpose, we use the Blanchard Fiscal Impulse (BFI) measure. The cross-country behaviour and the GDP effects of these measures are then scrutinized. The outcome of this analysis is that very little evidence of fiscal policy coordination can be detected. This result holds even if we take into account the forecast errors in terms of GDP growth.
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Bibliographic InfoPaper provided by Government Institute for Economic Research Finland (VATT) in its series Discussion Papers with number 160.
Date of creation: 01 Jan 1998
Date of revision:
Find related papers by JEL classification:
- E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
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