Elusive Counter-Cyclicality and Deliberate Opportunism? Fiscal Policy from Plans to Final Outcomes
AbstractDrawing on the European Commission’s Autumn forecasts, I estimate fiscal reaction functions with four different information sets, ranging from budget plans to final outcomes. I also analyse deviations from plans during budget implementation. In a panel of 15 EU countries from 1987 to 2006, moving from plans to final data generally weakens the counter-cyclicality of budget balances and expenditures (though not of revenues), and reinforces electoral effects. Deviations from plans play a negligible role in the former finding, as they are often acyclical;but have a major role in the latter, as they display a clear opportunistic pattern.
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Bibliographic InfoPaper provided by Banco de Portugal, Economics and Research Department in its series Working Papers with number w200906.
Date of creation: 2009
Date of revision:
Find related papers by JEL classification:
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
- H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
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