Fiscal rules and fiscal counter-cyclicality

Joao Jalles

Economics Letters, 2018, vol. 170, issue C, 159-162

Abstract: We assess the effect of fiscal rules on a new time-varying measure of fiscal counter-cyclicality computed for 60 countries over the period 1980–2014. First, we find that fiscal counter-cyclicality is positive and has been increasing over time, being larger in advanced economies. Second, we find that fiscal rules reduce the degree of fiscal counter-cyclicality. The result is especially strong for debt-based rules in advanced economies. Some design features hinder the degree of fiscal counter-cyclicality (such as escape clauses or enforcement procedures), while others (such as transparency) foster it.

Keywords: Fiscal rules; Weighted least squares; Time-varying coefficients; Fiscal stabilization; Government size; Filtering (search for similar items in EconPapers)
JEL-codes: C22 C33 E62 H30 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:170:y:2018:i:c:p:159-162

DOI: 10.1016/j.econlet.2018.06.020

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