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What Drives the Responsiveness of the Budget Balance to the Business Cycle in EU Countries?

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  • Gilles Mourre

    (European Commission DG ECFIN)

  • Aurélien Poissonnier

    (European Commission DG ECFIN)

Abstract

The European Commission methodology for computing the cyclically adjusted government budget balance provides a robust measurement of the fiscal position of the Member States. The fiscal semi-elasticities at the core of this method are structural parameters, mostly of fiscal nature, not linked to cyclical or other economic factors. Fiscal semi-elasticities also exhibit an emulation effect between neighbours and some groupings of countries.

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  • Gilles Mourre & Aurélien Poissonnier, 2019. "What Drives the Responsiveness of the Budget Balance to the Business Cycle in EU Countries?," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 54(4), pages 237-249, July.
    • Handle: RePEc:spr:intere:v:54:y:2019:i:4:d:10.1007_s10272-019-0831-2
    DOI: 10.1007/s10272-019-0831-2
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    Cited by:

    1. Gilles Mourre & Aurélien Poissonnier, 2019. "What Drives the Responsiveness of the Budget Balance to the Business Cycle in EU Countries?," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 54(4), pages 237-249, July.
    2. Stefan Schiman-Vukan, 2022. "Langfristige Perspektiven der öffentlichen Finanzen in Österreich," WIFO Studies, WIFO, number 70395, February.
    3. Aleksandr Arsenev & Philipp Heimberger & Bernhard Schütz, 2024. "Das konjunkturelle Verhalten der Staatsausgaben für Gesundheit und Soziales in Österreich und Deutschland: Wie robust ist die OECD-Methodik?," wiiw Research Reports in German language 25, The Vienna Institute for International Economic Studies, wiiw.
    4. Marcell Göttert & Timo Wollmershäuser, 2021. "Survey-Based Structural Budget Balances," EconPol Working Paper 59, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    5. Philipp Mohl & Gilles Mourre & Klara Stovicek, 2019. "Automatic Fiscal Stabilisers in the EU: Size and Effectiveness," European Economy - Economic Briefs 045, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    6. Philipp Heimberger, 2022. "The Cyclical Behaviour of Fiscal Policy During the Covid-19 Crisis," wiiw Working Papers 220, The Vienna Institute for International Economic Studies, wiiw.
    7. Nicolas End, 2020. "Rousseau's social contract or Machiavelli's virtue? A measure of fiscal credibility," AMSE Working Papers 2042, Aix-Marseille School of Economics, France.
    8. Dénes Kucsera & Hanno Lorenz & Wolfgang Nagl, 2022. "Die Entwicklung der Mittelschicht in Österreich und Deutschland [The Development of the Middle Class in Austria and Germany]," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 102(10), pages 789-794, October.
    9. Philipp Heimberger & Bernhard Schütz, 2022. "Die Budgetsemielastizität und ihre Auswirkungen auf Verschuldungsspielräume im Rahmen der Schuldenbremse [Budget Semi-Elasticity and its Impact on Debt Flexibility in the Context of the Debt Brake]," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 102(11), pages 834-837, November.
    10. Kaplanoglou, Georgia, 2022. "Consumption inequality and poverty in Greece: Evidence and lessons from a decade-long crisis," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 244-261.
    11. Manuel Díaz & Carmen Marín & Diego Martínez, 2023. "Determining factors and future scenarios for the Spanish public debt," Studies on the Spanish Economy eee2023-17, FEDEA.
    12. Heimberger, Philipp, 2023. "This time truly is different: The cyclical behaviour of fiscal policy during the Covid-19 crisis," Journal of Macroeconomics, Elsevier, vol. 76(C).
    13. Philipp Heimberger & Bernhard Schütz, 2022. "Evaluierung des Zusammenhangs von Produktionspotenzial und Budgetsemielastizität im Rahmen der deutschen Schuldenbremse," wiiw Research Reports in German language 22, The Vienna Institute for International Economic Studies, wiiw.
    14. Cláudia Braz & Maria Manuel Campos, 2021. "Challenges in measuring fiscal effects," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    15. Gábor P. Kiss, 2020. "Aggregate Fiscal Stabilisation Policy: Panacea or Scapegoat?," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 19(2), pages 55-87.
    16. Hristov, Nikolay & Hülsewig, Oliver & Kolb, Benedikt, 2024. "Macroprudential capital regulation and fiscal balances in the euro area," Discussion Papers 06/2024, Deutsche Bundesbank.
    17. Sven Langedijk & Aurélien Poissonnier & Edouard Turkisch, 2023. "The impact of macroeconomic developments and imbalances on fiscal outcomes," SN Business & Economics, Springer, vol. 3(6), pages 1-29, June.
    18. Doris Prammer, 2021. "Unprecedented fiscal (re)actions to ease the impact of the COVID-19 pandemic in Austria," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue Q4/20-Q1/, pages 153-173.

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    More about this item

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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