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Counter-cyclical budget policy across varieties of capitalism

Author

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  • Bruno Amable

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CEPREMAP - Centre pour la recherche économique et ses applications - ECO ENS-PSL - Département d'économie de l'ENS-PSL - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres, IUF - Institut universitaire de France - M.E.N.E.S.R. - Ministère de l'Education nationale, de l’Enseignement supérieur et de la Recherche)

  • Karim Azizi

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

The role of macroeconomic policy in the different varieties of capitalism has been largely ignored. Recent contributions to the literature have argued that nonliberal economies, i.e. coordinated market economies, should be expected to have less accommodating (i.e. less countercyclical) macroeconomic policies than liberal varieties. Using time-series cross-section data on 18 OECD countries between 1980 and 2009, this paper tests that hypothesis and, more particularly, whether the reaction of discretionary fiscal policy to macroeconomic shocks is different between liberal and nonliberal varieties of capitalism. The test results do not support the conclusion that nonliberal economies' macroeconomic policy would be less countercyclical than that of liberal economies. On the contrary, discretionary fiscal policy has been more countercyclical in former economies

Suggested Citation

  • Bruno Amable & Karim Azizi, 2014. "Counter-cyclical budget policy across varieties of capitalism," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00941813, HAL.
  • Handle: RePEc:hal:cesptp:hal-00941813
    DOI: 10.1016/j.strueco.2014.01.001
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    2. Amable, Bruno, 2022. "Nothing new under the sun: The so-called "growth model perspective"," IPE Working Papers 195/2022, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    3. Toloudis Nicholas, 2015. "Varieties of Capitalism and Fiscal Stimulus, 2008–2010," TalTech Journal of European Studies, Sciendo, vol. 5(2), pages 56-69, October.
    4. Baccaro, Lucio & Pontusson, Jonas, 2018. "Comparative political economy and varieties of macroeconomics," MPIfG Discussion Paper 18/10, Max Planck Institute for the Study of Societies.

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