Fiscal impulse in the Brazilian economy
This paper develops an alternative indicator of fiscal policy which allows a more accurate picture of the underlying fiscal trend in the Brazilian economy over the recent period. This indicator corrects conventional fiscal-stance measures for the effects of theeconomic cycle, and yields a measure of the discretionary change in the budgetary position of the public-sector, known as the fiscal impulse. Section 2 briefly examines the evolution of traditional fiscal policy indicators over the recent period, detecting the bottom line of the changes in the fiscal stance. The details of the estimation of the fiscal impulse measure for the Brazilian economy are presented in Section 3. Section 4 concludes the paper with a reassessment of recent fiscal policy episodes, using the data generated in the previous section. The resulting fiscal-impulse measure indicates that, on average, the fiscal stance during 1989-96 was more expansionist than suggested by traditional fiscal policy indicators.
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- Beach, Charles M & MacKinnon, James G, 1978. "A Maximum Likelihood Procedure for Regression with Autocorrelated Errors," Econometrica, Econometric Society, vol. 46(1), pages 51-58, January.
- Giambiagi, Fabio & Barbosa, Fabio, 1995. "O ajuste fiscal de 1990-93: uma análise retrospectiva," Revista Brasileira de Economia, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil), vol. 49(3), July.
- Sheetal K. Chand, 1992. "Fiscal Impulses and their Fiscal Impact," IMF Working Papers 92/38, International Monetary Fund.
- Olivier Jean Blanchard, 1990. "Suggestions for a New Set of Fiscal Indicators," OECD Economics Department Working Papers 79, OECD Publishing.
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