Determinants of fiscal budget volatility in old versus new EU member states

Eugenia Mara ()

MPRA Paper from University Library of Munich, Germany

Abstract: In this study we perform an analysis of the volatility of the budget deficit for EU countries. We address this issue starting from the new requirements of fiscal discipline imposed by the Treaty on Stability, Coordination and Governance adopted by 25 European Union member states and taking into account the economic crisis impact. The major purpose of this study is to identify the most significant determinants of budget deficit volatility in a comparative study for old EU member states and New Member States (NMS). This study aims to test the impact of macroeconomic variables such as public expenditures, economic growth rate, and unemployment on the budget balance volatility, based on panel data. The final purpose of the article is to reveal the strategies to stop the immense increase in fiscal deficits and to regain fiscal stability to fulfill the new rules of fiscal governance. We anticipate that the implementation of this new fiscal discipline requires a more efficient public sector for both old and NMS and a reconsideration of state intervention in the economy.

Keywords: budget deficit; fiscal policy; economic growth (search for similar items in EconPapers)
JEL-codes: E61 E62 H3 H62 (search for similar items in EconPapers)
Date: 2012-09
New Economics Papers: this item is included in nep-eec, nep-fdg and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Determinants of fiscal budget volatility in old versus new EU member states (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:42555

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