 A set of estimated fiscal rules for a cross-section of countries: Stabilization and consolidation through which instruments?Journal of Macroeconomics, 2014, vol. 42, issue C, 184-198 Abstract: Not much cross-country evidence exists on the time-series behavior of individual fiscal instruments in response to the public debt and to output. To remedy this situation, this study provides a set of detailed estimated fiscal reaction functions (or “fiscal rules”) governing these responses for a panel of twenty OECD countries. A number of commonalities and differences emerge. In general, the countries in the panel adjust tax revenues strongly in response to the public debt, and they adjust tax revenues and transfer payments but, interestingly, not tax rates or government purchases, strongly in response to output. Furthermore, a high rate of transfer payments is associated in the cross-section with reduced output volatility. These results support some recent developments in the theoretical literature, namely, an increased emphasis on the effects of countercyclical transfer payments as an anti-cyclical fiscal policy instrument. Keywords: Fiscal policy; Fiscal rule; Deficits; Taxes; Government purchases; Transfer payments (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:42:y:2014:i:c:p:184-198 DOI: 10.1016/j.jmacro.2014.08.001 Access Statistics for this article Journal of Macroeconomics is currently edited by Douglas McMillin and Theodore Palivos More articles in Journal of Macroeconomics from Elsevier |
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