The redistributive effect of the Portuguese welfare state through pensions, benefits and taxes is investigated in detail over the 2006-10 period using disposable income as benchmark. All social and fiscal policy instruments analysed contribute significantly to the reduction in inequality and...

Using bootstrap panel analysis, allowing for cross-country correlation, without the need of pre-testing for unit roots, we study the causality between government revenue and spending for the EU in the period 1960-2006. Spend-and-tax causality is found for Italy, France, Spain, Greece, and...

In this paper we review the European macroeconomic policy framework, and address the issue of setting safe deficit targets - targets that make it very unlikely that a country exceeds the 3 per cent ceiling of the Stability and Growth Pact. In this context, the scope for an increase in public...

In order to assess the existence of expansionary fiscal consolidations in Europe, panel data models for private consumption are estimated for the EU15 countries, using annual data over the period 1970–2005. Three alternative approaches to determine fiscal episodes are used, and the level of...

The main focus of this paper is the relation between the cyclical components of total revenues and expenditures and the budget balance in France, Germany, Portugal, and Spain. We try to uncover past trends behind the development of public finances that contribute to explaining the current stance...

This paper analyses the effects in terms of size and volatility of government revenue and spending on growth in OECD and EU countries. The results of the paper suggest that both variables are detrimental to growth. In particular, looking more closely at the effect of each component of government...

We investigate the macroeconomic effects of fiscal policy using a Bayesian Structural Vector Autoregression approach. We build on a recursive identification scheme, but we: (i) include the feedback from government debt (ii); look at the impact on the composition of output; (iii) assess the...

We review the main budgetary measures not accepted by the Portuguese Constitutional Court in the Budget Laws of 2012, 2013 and 2014. Considering the feedback effect of the fiscal impulse, the impact on the budget balance is -0.42% and of -0.34% of GDP respectively for 2013 and for 2014; in both...

We assess the sustainability of public finances in OECD countries using panel unit root and cointegration analyses. Results show: no cointegration (no sustainability) between revenues and expenditures; improvement of the primary balances after worsening debt ratios; causality from government...

Numerical fiscal rules mitigate the bias of pro-cyclicality, as an alternative to discretionary measures conducted by policy makers. We assess whether fiscal rules impact budget balances and sovereign yields, and we perform a simulation exercise to compute debt developments of EU countries,...