The Economic Effects of the EU Budget: A VAR Analysis
AbstractThis paper analyzes the allocation, redistribution and stabilization role of the EU budget from 1976 to 2001. We use impulse responses from VAR models to infer the dynamic effect of a country's GNP on its disposable income--defined as GNP plus net EU budget transfers--both in the short run (stabilization) and in the long run (redistribution). In addition, we measure the allocation role of net budget transfers through their "dynamic multiplier" effect on a country's GNP, circumventing the difficult task of estimating allocation via costs and benefits of trade flows. By disaggregating our data by subperiod and by budget component, we discover how diverse the above effects can be in different decades and for different budget programs. Finally, our framework allows us to establish some additional stylized facts that help derive relevant economic relations and useful policy conclusions.
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Bibliographic InfoPaper provided by Institute of Economic Research, Korea University in its series Discussion Paper Series with number 0722.
Length: 33 pages
Date of creation: 2007
Date of revision:
EU Budget; stabilization; redistribution and allocation;
Other versions of this item:
- Pierfederico Asdrubali & Soyoung Kim, 2008. "The Economic Effects of the EU Budget: A VAR Analysis," Journal of Common Market Studies, Wiley Blackwell, vol. 46, pages 933-968, December.
- H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-11-10 (All new papers)
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