Assessing long-term fiscal developments: evidence from Portugal
We use a Three-Stage Least Square (TSLS) method and a system of equations to recursively estimate two components of fiscal policy - responsiveness and persistence - and to infer about the sources of fiscal deterioration (improvement). The results suggest that (i) government spending exhibits higher persistence than government revenue and (ii) government revenue is more responsive to the business cycle than government spending, pointing to fiscal deterioration issues.
Year of publication: |
2011
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Authors: | Afonso, Antonio ; Sousa, Ricardo |
Published in: |
Applied Economics Letters. - Taylor & Francis Journals, ISSN 1350-4851. - Vol. 18.2011, 1, p. 1-5
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Publisher: |
Taylor & Francis Journals |
Saved in:
freely available
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