Fiscal Policy Responiveness, Persistence and Discretion

Antonio Afonso, Luca Agnello () and Davide Furceri ()

No 2008/50, Working Papers from Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon.

Abstract: 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.

Keywords: Fiscal Policy; Fiscal Volatility. (search for similar items in EconPapers)
JEL-codes: E62 H50 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba and nep-mac
Date: 2008-10
View list of references

Downloads: (external link)
http://pascal.iseg.utl.pt/~depeco/wp/wp502008.pdf (application/pdf)

Related works:
Working Paper: Fiscal Policy Responsiveness, Persistence, and Discretion (2008)
Working Paper: Fiscal policy responsiveness, persistence and discretion (2008)
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:ise:isegwp:wp502008

Access Statistics for this paper

More papers in Working Papers from Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon.
Address: Department of Economics, School of Economics and Management (ISEG), Technical University of Lisbon, Rua do Quelhas 6, 1200-781 LISBON, PORTUGAL
Series data maintained by Vitor Escaria ().