Investigating the Cyclical Behavior of Fiscal Policy in the Republic of Macedonia during the Period of Transition
The main aim of this research is to investigate the cyclical behavior of fiscal policy with respect to output gap fluctuations in the Republic of Macedonia during the period 1991-2009. We use two different fiscal policy measures: 1) the cyclically unadjusted primary budget balance and 2) the cyclically adjusted primary budget balance as a proxy indicator of the fiscal policy stance. This analysis also aims to explore whether there was a substantial change in the fiscal policy behavior prior to 1996 due to the turbulent initial period of transition and the switch in monetary policy strategy. We additionally control for other factors that also seem to have had a significant impact over the fiscal policy behavior, such as the armed conflict in 2001 and the impact of public debt as a proxy indicator of budget financing constraints. The estimated results with respect to both measures, the cyclically unadjusted and cyclically adjusted budget balance, indicate differences in the fiscal policy behavior prior to and after 1996. More precisely, the results imply that the fiscal policy behavior prior to 1996 was procyclical, whereas afterwards the fiscal policy became countercyclical. These results are robust to different measures of the output gap and different frequency of the data sets.
Volume (Year): 13 (2011)
Issue (Month): 1 (April)
|Contact details of provider:|| Postal: Trg J.F.Kennedy 7, HR - 10000 Zagreb|
Phone: (**385 1) 23 35 700
Fax: (**385 1) 23 35 165
Web page: http://www.eizg.hr
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2003.
"Instrumental variables and GMM: Estimation and testing,"
StataCorp LP, vol. 3(1), pages 1-31, March.
- Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2002. "Instrumental variables and GMM: Estimation and testing," United Kingdom Stata Users' Group Meetings 2003 02, Stata Users Group.
- Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2002. "Instrumental variables and GMM: Estimation and testing," Boston College Working Papers in Economics 545, Boston College Department of Economics, revised 14 Feb 2003.
- Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2002. "Instrumental variables and GMM: Estimation and testing," North American Stata Users' Group Meetings 2003 05, Stata Users Group.
- Graciela L. Kaminsky & Carmen M. Reinhart & Carlos A. Végh, 2005. "When It Rains, It Pours: Procyclical Capital Flows and Macroeconomic Policies," NBER Chapters,in: NBER Macroeconomics Annual 2004, Volume 19, pages 11-82 National Bureau of Economic Research, Inc.
- Reinhart, Carmen & Kaminsky, Graciela & Vegh, Carlos, 2004. "When it rains, it pours: Procyclical capital flows and macroeconomic policies," MPRA Paper 13883, University Library of Munich, Germany.
- Graciela L. Kaminsky & Carmen M. Reinhart & Carlos A. Vegh, 2004. "When it Rains, it Pours: Procyclical Capital Flows and Macroeconomic Policies," NBER Working Papers 10780, National Bureau of Economic Research, Inc.
- Talvi, Ernesto & Vegh, Carlos A., 2005. "Tax base variability and procyclical fiscal policy in developing countries," Journal of Development Economics, Elsevier, vol. 78(1), pages 156-190, October.
- Ethan Ilzetzki & Carlos A. Vegh, 2008. "Procyclical Fiscal Policy in Developing Countries: Truth or Fiction?," NBER Working Papers 14191, National Bureau of Economic Research, Inc.
- Cameron,A. Colin & Trivedi,Pravin K., 2005. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9780521848053, December.
- Gábor P. Kiss & Zoltán Reppa, 2010. "Quo vadis, deficit? How high the tax level will be when the economic cycle reverses?," MNB Bulletin (discontinued), Magyar Nemzeti Bank (Central Bank of Hungary), vol. 5(3), pages 47-56, October.
- Badinger, Harald, 2010. "Output volatility and economic growth," Economics Letters, Elsevier, vol. 106(1), pages 15-18, January.
- Bogdan Bogdanov, 2010. "Cyclicality of Fiscal Policy over the Business Cycle: an Empirical Study on Developed and Developing Countries," Working paper series 12010en, Agency for Economic Analysis and Forecasting.
- Hall, Alastair R., 2004. "Generalized Method of Moments," OUP Catalogue, Oxford University Press, number 9780198775201, April.
- Mackiewicz, Michał, 2008. "Determinants of Cyclicality of Fiscal Surpluses in The OECD Countries," MPRA Paper 16034, University Library of Munich, Germany. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:iez:survey:ces-v13_04-2011_angelovska-bezovska-bogoev-mitreska-kadievska-vojnovik. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Doris Banicevic)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.