Determinants of fiscal budget volatility in old versus new EU member states
AbstractIn this study we perform an analysis of the volatility of the budget deficit for EU countries. We address this issue starting from the new requirements of fiscal discipline imposed by the Treaty on Stability, Coordination and Governance adopted by 25 European Union member states and taking into account the economic crisis impact. The major purpose of this study is to identify the most significant determinants of budget deficit volatility in a comparative study for old EU member states and New Member States (NMS). This study aims to test the impact of macroeconomic variables such as public expenditures, economic growth rate, and unemployment on the budget balance volatility, based on panel data. The final purpose of the article is to reveal the strategies to stop the immense increase in fiscal deficits and to regain fiscal stability to fulfil the new rules of fiscal governance. We anticipate that the implementation of this new fiscal discipline requires a more efficient public sector for both old and NMS and a reconsideration of state intervention in the economy. JEL Classification: H62; E62; H3; H61;
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Bibliographic InfoPaper provided by ISEG - School of Economics and Management, Department of Economics, University of Lisbon in its series Working Papers Department of Economics with number 2012/31.
Date of creation: Sep 2012
Date of revision:
Contact details of provider:
Postal: Department of Economics, ISEG - School of Economics and Management, University of Lisbon, Rua do Quelhas 6, 1200-781 LISBON, PORTUGAL
Web page: https://aquila1.iseg.ulisboa.pt/aquila/departamentos/EC
budget deficit; fiscal policy; economic growth.;
Other versions of this item:
- Mara, Eugenia-Ramona, 2012. "Determinants of fiscal budget volatility in old versus new EU member states," MPRA Paper 42555, University Library of Munich, Germany.
- H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
- H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
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