A Real Time Tax Smoothing Based Fiscal Policy Rule

Elizabeth C Wakerly, Elena Loukoianova and Shaun P. Vahey
Additional contact information
Elizabeth C Wakerly: University of East Anglia

No 215, Royal Economic Society Annual Conference 2003 from Royal Economic Society

Abstract: We consider the real-time implementation of a fiscal policy rule based on tax smoothing (Barro (1979), Bohn (1998)). We show that the tax smoothing approach, augmented by fiscal habit considerations, provides a surprisingly accurate description of US budget surplus movements. In order to investigate the robustness of the policy implications of the rule, we construct a real-time US fiscal data set, complementing the data documented by Croushore and Stark (2001). For each variable, we record the different vintages, reflecting the remeasurements that occur over time. We demonstrate that the rule provides a useful benchmark for policy analysis that is robust to real-time remeasurements.

Keywords: fiscal rules; tax smoothing; fiscal habits; real-time data (search for similar items in EconPapers)
JEL-codes: C82 E62 E66 (search for similar items in EconPapers)
Date: 2003-06-04
View citations in EconPapers

Downloads: (external link)
http://repec.org/res2003/Wakerly.pdf full text

Related works:
Working Paper: A Real Time Tax Smoothing Based Fiscal Policy Rule (2002)
Working Paper: A Real Time Tax Smoothing Based Fiscal Policy Rule (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:ecj:ac2003:215

Access Statistics for this paper

More papers in Royal Economic Society Annual Conference 2003 from Royal Economic Society
Contact information at EDIRC.
Series data maintained by Christopher F. Baum ().