This paper provides an empirical analysis of fiscal illusion by estimating an index of fiscal illusion for 28 European countries over the period 1995–2008 employing a structural equation approach. Using MIMIC models, the paper investigates the main indicators of fiscal illusion and develops an...

This paper provides an empirical analysis of fiscal illusion by estimating an index of fiscal illusion for 28 European countries over the period 1995–2008 employing a structural equation approach. Using Multiple Indicators Multiple Causes models, the paper investigates the main indicators of...