Do fiscal rules cause budgetary outcomes?

Signe Krogstrup and Sébastien Wälti ()

Economic Papers from Trinity College Dublin, Economics Department

Abstract: This paper focuses on the observed empirical relationship between fiscal rules and budget deficits, and examines whether this correlation is driven by an omitted variable, namely voter preferences. We make use of two different estimation methods to capture voter preferences in a panel of Swiss sub-federal jurisdictions. First, we include a recently constructed measure of fiscal preferences. Second, we capture preferences through fixed effects with a structural break as women are enfranchised. We find that fiscal rules continue to have a significant impact on real budget balances.

Keywords: Fiscal policy; fiscal rules; fiscal institutions; budget deficits; fiscal preferences; endogeneity (search for similar items in EconPapers)
JEL-codes: C2 D7 E6 H6 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-mac and nep-pbe
Date: Written 2007-04
View list of references View citations in EconPapers

Downloads: (external link)
http://www.tcd.ie/Economics/TEP/2007/TEP0607.pdf

Related works:
Working Paper: Do fiscal rules cause budgetary outcomes? (2007)
Journal Article: Do fiscal rules cause budgetary outcomes? (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Access Statistics for this paper

More papers in Economic Papers from Trinity College Dublin, Economics Department
Contact information at EDIRC.
Series data maintained by Dylan Sutherland (). This e-mail address is bad, please contact .