English, Article, Journal or magazine article edition: Fiscal Policy Responsiveness, Persistence, and Discretion António Afonso; Luca Agnello; Davide Furceri

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Bookmark: http://trove.nla.gov.au/version/146345
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Fiscal policy responsiveness, persistence and discretion
Author
  • António Afonso
  • Luca Agnello
  • Davide Furceri
Physical Description
  • preprint
Notes
  • In this working paper, we decompose fiscal policy in three components: i) responsiveness, ii) persistence and iii) discretion. Using a sample of 132 countries, our results point out that fiscal policy tends to be more persistent than responding to output variations. We also found that while the effect of cross-country covariates is positive (negative) for discretion, it is negative (positive) for persistence, suggesting that countries with higher persistence have lower discretion and vice versa. In particular, while government size, country size and income have negative effects on the discretion component of fiscal policy, they tend to increase fiscal policy persistence. Réaction au cycle, persistance et effet discrétionnaire de la politique budgétaireNous décomposons la politique budgétaire en trois composantes : i) réponse, ii) persistance et iii) effet discrétionnaire. Utilisant un échantillon de 132 pays, nos résultats montrent que la politique budgétaire tend à être plus persistante qu’elle ne répond aux variations du PIB. Nous trouvons également qu’alors que l’effet des covariations entre pays affecte positivement (négativement) l’effet discrétionnaire, il a un effet négatif (positif) sur la persistance. Cela suggère que les pays dotés d’une forte persistance ont un effet discrétionnaire plus faible et vice versa. En particulier, alors que la taille du gouvernement, la taille du pays et le revenu ont des effets négatifs sur la composante discrétionnaire de la politique budgétaire, ils tendent à augmenter la persistance de la politique budgétaire.
  • fiscal policy, politique fiscale, fiscal volatility, volatilité fiscale
  • RePEc:oec:ecoaaa:659-en
  • We decompose fiscal policy in three components: i) responsiveness, ii) persistence and iii) discretion. Using a sample of 132 countries, our results point out that fiscal policy tends to be more persistent than to respond to output conditions. We also found that while the effect of cross-country covariates is positive (negative) for discretion, it is negative (positive) for persistence thereby suggesting that countries with higher persistence have lower discretion and vice versa. In particular, while government size, country size and income have negative effects on the discretion component of fiscal policy, they tend to increase fiscal policy persistence. JEL Classification: E62, H50.
  • Fiscal Policy, Fiscal Volatility.
  • RePEc:ecb:ecbwps:20080954
Language
  • English
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