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Varieties of Capitalism and Fiscal Stimulus, 2008–2010

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  • Toloudis Nicholas

    (The College of New Jersey 2000 Pennington Road, Ewing, NJ 08628, U.S.A.)

Abstract

This paper tests the Varieties of Capitalism (VoC) framework to explain variation in fiscal stimulus measures across OECD countries in response to the 2008-2010 economic crisis. Following Soskice (2007), I argue that coordinated market economies are less flexible with fiscal policy than liberal market economies. Multivariate analysis across 23 OECD countries demonstrates that VoC is more powerful than three competing theories: fiscal institutions, which hypothesizes more stimulus in countries with less restrictive budgetary rules; debt credibility, which hypothesizes more stimulus in less indebted countries; and political partisanship, which hypothesizes more stimulus in countries governed by the left.

Suggested Citation

  • Toloudis Nicholas, 2015. "Varieties of Capitalism and Fiscal Stimulus, 2008–2010," TalTech Journal of European Studies, Sciendo, vol. 5(2), pages 56-69, October.
    • Handle: RePEc:vrs:bjeust:v:5:y:2015:i:2:p:56-69:n:4
    DOI: 10.1515/bjes-2015-0013
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    References listed on IDEAS

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    1. Amable, Bruno & Azizi, Karim, 2014. "Counter-cyclical budget policy across varieties of capitalism," Structural Change and Economic Dynamics, Elsevier, vol. 30(C), pages 1-9.
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    3. Joachim Wehner, 2006. "Assessing the Power of the Purse: An Index of Legislative Budget Institutions," Political Studies, Political Studies Association, vol. 54, pages 767-785, December.
    4. Mr. Fabian Valencia & Mr. Luc Laeven, 2012. "Systemic Banking Crises Database: An Update," IMF Working Papers 2012/163, International Monetary Fund.
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