Effects of Fiscal Rules on Budgetary Outcomes: The Case of the European Union Member States

Agata Szymanska

Acta Oeconomica, 2016, vol. 66, issue 4, 597-616

Abstract: The aim of this paper is to investigate the influence of fiscal rules on the budgetary outcomes in 27 European Union countries. In particular, the paper focuses on assessing whether the impact of fiscal rules is statistically significant and numerically meaningful. In order to assess the influence, we use a dynamic panel data model. In our baseline model, we introduce the fiscal rule index as an explanatory variable. Our estimation rests on the fiscal reaction function. The analysis shows that the fiscal rule index positively affects the cyclically-adjusted primary balance and the cyclically-adjusted balance.

Keywords: dynamic panel; fiscal rule index; European Union (search for similar items in EconPapers)
JEL-codes: E62 H60 H62 (search for similar items in EconPapers)
Date: 2016
Note: The author would like to thank Paweł Baranowski from the University of Lodz and the two unknown reviewers for their helpful comments and support during the preparation of this version of the article. Of course, any errors and all opinions expressed are those of the author.
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