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Fiscal regimes in the EU

  • António AFONSO
  • Priscilla TOFFANO

We assess the existence of fiscal regime shifts in the U.K., Germany, and Italy, using Markov switching fiscal rules. On the basis of a newly built quarterly data set, our results show the existence of fiscal regimes shifts, sometimes coupled with regime switches also regarding monetary developments. While in the UK “active” and “passive” (Leeper, 1991) fiscal regimes are somewhat clearer cut, in Germany fiscal regimes have been overall less active, supporting more fiscal sustainability. For Italy, a more passive fiscal behaviour is uncovered in the run-up to EMU.

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File URL: http://feb.kuleuven.be/drc/Economics/research/dps-papers/dps-13/dps1306.pdf
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Paper provided by KU Leuven, Faculty of Economics and Business, Department of Economics in its series Working Papers Department of Economics with number ces13.06.

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Date of creation: Apr 2013
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Handle: RePEc:ete:ceswps:ces13.06
Contact details of provider: Web page: http://feb.kuleuven.be/Economics/

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