Panel data evidence on the effects of fiscal impulses in the EU New Member States

Paweł Borys, Piotr Ciżkowicz () and Andrzej Rzońca
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Paweł Borys: Warsaw School of Economics, https://sgh.waw.pl

No 161, NBP Working Papers from Narodowy Bank Polski

Abstract: We identify fiscal impulses in the EU New Member States using four different methods and apply econometric panel data techniques to determine what is the response of the output and its components to those impulses. We also directly test the effects of fiscal impulses on labour costs and housholds’ expectations. The results confirm that the composition of impulses matters for output and its components’ response. Notably, we find evidence that investment and export growth accelerates after fiscal adjustment and decelerates after fiscal stimulus when the impulses are expenditure-based. In turn, private consumption seems not to respond to fiscal impulses regardless of their size. The analysis confirms that expenditure-based fiscal adjustments enhance wage moderation and thereby competitiveness of domestic enterprises, while expenditure-based fiscal stimuli weaken it. By contrast, we do not find evidence that fiscal impulses have an effect on households’ confidence.

Keywords: fiscal consolidation; non-Keynesian effects; New Member States; panel data (search for similar items in EconPapers)
JEL-codes: C23 D22 D81 E23 E32 E44 E62 (search for similar items in EconPapers)
Pages: 47
Date: 2013
New Economics Papers: this item is included in nep-eec, nep-fdg, nep-mac, nep-pbe and nep-tra
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https://static.nbp.pl/publikacje/materialy-i-studia/161_en.pdf (application/pdf)

Related works:
Journal Article: Panel Data Evidence on the Effects of Fiscal Policy Shocks in the EU New Member States (2014)
Working Paper: Panel data evidence on effects of fiscal impulses in the EU New Member States (2013)
Working Paper: Panel data evidence on non-Keynesian efects of fiscal policy in the EU New Member (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:nbp:nbpmis:161

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