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Reakční funkce a udržitelnost fiskální politiky
[Fiscal Policy Reaction Function and Sustainability]

Author

Listed:
  • Zdeněk Pikhart
  • Lukáš Pfeifer
  • Pavla Chmelová

Abstract

The article deals with the issue of fiscal sustainability, which has gained in importance after the recent financial and sovereign debt crisis. The article defi nes the term of financial sustainability in its theoretical part. The next section continues with the historical fiscal data for countries in the European Union. The main part of the article estimates reaction function of fiscal policy using panel data regression model. Tests are performed for multiple groups of countries, namely for the entire European Union, the old member states, the new member states, and the states most affected by the recent financial and sovereign debt crisis. This classification allows higher accuracy and better interpretability of the model results. Data results show rather pro-cyclicality of fiscal authorities' behaviour.

Suggested Citation

  • Zdeněk Pikhart & Lukáš Pfeifer & Pavla Chmelová, 2015. "Reakční funkce a udržitelnost fiskální politiky [Fiscal Policy Reaction Function and Sustainability]," Politická ekonomie, Prague University of Economics and Business, vol. 2015(5), pages 545-569.
    • Handle: RePEc:prg:jnlpol:v:2015:y:2015:i:5:id:1013:p:545-569
    DOI: 10.18267/j.polek.1013
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    References listed on IDEAS

    as
    1. Olivier Jean Blanchard, 1990. "Suggestions for a New Set of Fiscal Indicators," OECD Economics Department Working Papers 79, OECD Publishing.
    2. Gunter Coenen & Roland Straub & Mathias Trabandt, 2012. "Fiscal Policy and the Great Recession in the Euro Area," American Economic Review, American Economic Association, vol. 102(3), pages 71-76, May.
    3. Mr. Jonathan David Ostry & Mr. Abdul d Abiad, 2005. "Primary Surpluses and sustainable Debt Levels in Emerging Market Countries," IMF Policy Discussion Papers 2005/006, International Monetary Fund.
    4. repec:ecb:ecbwps:20111429 is not listed on IDEAS
    5. Nathalie Girouard & Christophe André, 2005. "Measuring Cyclically-adjusted Budget Balances for OECD Countries," OECD Economics Department Working Papers 434, OECD Publishing.
    6. Noyer, C., 2012. "Central banking in a context of high public debt," Financial Stability Review, Banque de France, issue 16, pages 9-13, April.
    7. Ales Krejdl, 2006. "Fiscal Sustainability - Definition, Indicators and Assessment of Czech Public Finance Sustainability," Working Papers 2006/3, Czech National Bank, Research and Statistics Department.
    8. Vito Polito & Mike Wickens, 2007. "Measuring the Fiscal Stance," Discussion Papers 07/14, Department of Economics, University of York.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    fiscal sustainability; fiscal policy; financial and sovereign debt crisis; European Union;
    All these keywords.

    JEL classification:

    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General

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