changes in the fiscal stance and the composition of public spending
AbstractWe consider the impact of both cyclical and structural changes in the fiscal stance on public spending composition for a panel of EU countries, including individual components of public investment. We find that both cyclically-induced and structural changes in the fiscal stance affect the composition of public spending, with fiscal tightening of both types increasing the relative share of investment and loosening favouring consumption expenditure. Of the components of public investment, infrastructure and redistribution respond to cyclical changes in the fiscal stance, while investment in hospitals and schools responds most clearly to structural changes.
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Bibliographic InfoPaper provided by European Investment Bank, Economics Department in its series Economic and Financial Reports with number 2010/2.
Length: 31 pages
Date of creation: 12 Mar 2010
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fiscal policy; public expenditure; fiscal stance;
Other versions of this item:
- Juraj Stančík & Timo Välilä, 2012. "Changes in the fiscal stance and the composition of public spending," Empirical Economics, Springer, vol. 43(1), pages 199-217, August.
- Juraj Stancik & Timo Valila, 2009. "Changes in the Fiscal Stance and the Composition of Public Spending," CERGE-EI Working Papers wp394, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
- H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
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