Fiscal Policy Responsiveness, Persistence, and Discretion: = Réaction au cycle, persistance et effet discrétionnaire de la politique budgétaire

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 effe...

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Bibliographic Details
Main Author: Afonso, António (Author)
Other Authors: Agnello, Luca (Contributor), Furceri, Davide (Contributor)
Format: Electronic eBook
Language:English
Published: Paris OECD Publishing 2008
Series:OECD Economics Department Working Papers no.659
Subjects:
Online Access:DE-862
DE-863
Summary: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.
Physical Description:1 Online-Ressource (34 Seiten) 21 x 29.7cm.

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