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3-Step Analysis of Public Finances Sustainability : The Case of the European Union

Afonso, António - 2008

We use a 3-step analysis to assess the sustainability of public finances in the EU27. Firstly, we perform the SURADF specific panel unit root test to investigate the mean-reverting behaviour of general government expenditures and revenues ratios. Secondly, we apply the bootstrap panel...

Persistent link: https://www.econbiz.de/10012770443

Trust in Government and Fiscal Adjustments

Bursian, Dirk - 2013

The paper looks at the determinants of fiscal adjustments as reflected in the primary surplus of countries. Our conjecture is that governments will usually find it more attractive to pursue fiscal adjustments in a situation of relatively high growth, but based on a simple stylized model of...

Persistent link: https://www.econbiz.de/10013079290

Euro Membership and Fiscal Reaction Functions

Weichenrieder, Alfons J. - 2013

The paper uses fiscal reaction functions for a panel of euro-area countries to investigate whether euro membership has reduced the responsiveness of countries to shocks in the level of inherited debt compared to the period prior to succession to the euro. While we find some evidence for such a...

Persistent link: https://www.econbiz.de/10013080736

Public Debt and Total Factor Productivity

Kaas, Leo - 2015

This paper explores the role of public debt and fiscal deficits on factor productivity in an economy with credit market frictions and heterogeneous firms. When credit market conditions are sufficiently weak, low interest rates permit the government to run Ponzi schemes so that permanent primary...

Persistent link: https://www.econbiz.de/10013030480

Sustainability of German Fiscal Policy and Public Debt : Historical and Time Series Evidence for the Period 1850-2010

Burret, Heiko - 2013

In the last decades, the majority of OECD countries has experienced a continuous increase in public debt. The European debt crisis has prompted a fundamental re‐evaluation of public debt sustainability and the looming threat of sovereign debt default. Due to a multitude of large scale events...

Persistent link: https://www.econbiz.de/10013085753

Successful Fiscal Adjustments - Does Choice of Fiscal Instrument Matter?

Holden, Steinar; Midthjell, Nina - 2021

We examine fiscal adjustment episodes in 24 OECD countries in order to find how austerity affects debt and growth, and whether the choice of fiscal instrument matters for the results. Influential existing studies argue that spending cuts are more likely to successfully reduce debt and enhance...

Persistent link: https://www.econbiz.de/10013315701

Sovereign Bond Market Reactions to Fiscal Rules and No-Bailout Clauses - The Swiss Experience

Feld, Lars P. - 2013

We investigate the political determinants of risk premiums which sub-national governments in Switzerland have to pay for their sovereign bond emissions. For this purpose we analyse financial market data from 288 tradable cantonal bonds in the period from 1981 to 2007. Our main focus is on two...

Persistent link: https://www.econbiz.de/10013082962

Macroeconomic Effects of Fiscal Adjustment : A Tale of Two Approaches

Yang, Weonho - 2013

We investigate the short-term effects of fiscal adjustment on economic activity in 20 OECD countries from 1970 to 2009. We compare two approaches: the traditional approach based on changes in cyclically adjusted primary balance (CAPB) and the narrative approach based on historical records....

Persistent link: https://www.econbiz.de/10013075620

Fiscal Spillovers in the Euro Area

Caporale, Guglielmo Maria - 2012

This paper analyses the dynamic effects of fiscal imbalances in a given EMU member state on the borrowing costs of … VAR, or GVAR) using quarterly data for the EMU period suggests that euro-denominated government yields are strongly linked … imbalances in Italy and in other peripheral countries should be closely monitored by their EMU partners and the European …

Persistent link: https://www.econbiz.de/10013112600

Institutionalized Bailouts and Fiscal Policy : The Consequences of Soft Budget Constraints

Fink, Alexander - 2010

States have soft budget constraints when they can expect a bailout by the federal government in the event of a financial crisis. This gives rise to incentives for unsound state fiscal policy. We test whether states with softer budget constraints have higher debt and deficits, receive more...

Persistent link: https://www.econbiz.de/10013150672

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