Public Policies Influence on Fiscal Deficit in the EU-28: Common Correlated Effects Approach
Kosta Josifidis,
Radmila Dragutinovíc Mitrovíc (),
Olgica Glavaski () and
Novica Supic
Additional contact information
Radmila Dragutinovíc Mitrovíc: Univesity of Belgrade
Olgica Glavaski: University of Novi Sad
Hacienda Pública Española / Review of Public Economics, 2018, vol. 227, issue 4, 63-101
Abstract:
This paper empirically investigates heterogeneous effects of different public policies (health, education, pension expenditure) on fiscal deficit in the circumstances when fiscal sustainability became questionable in EU economies. The research is based on the sample of EU-28 over the period 19952015. The empirical analysis is conducted within the econometric framework of heterogeneous, crosssectional dependent panels, using common correlated effects approach. According to the main findings of the paper, different effects of public policies between groups of developed and emerging European economies are evident but not crucial. These effects on fiscal deficit are heterogeneous across all countries, with different magnitude of pension, health and education expenditure impact. Due to the population ageing, pension expenditure has the most frequent and the most intensive influence on fiscal deficit deepening, following by education expenses. It means that policymakers are facing with trade-off related to old/young population, and that they are mostly oriented toward old population (voters).
Keywords: Public policies; Fiscal deficit; EU-28; Common correlated effects; Heterogeneous panels (search for similar items in EconPapers)
JEL-codes: C33 H50 H62 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)
Downloads: (external link)
https://www.ief.es/docs/destacados/publicaciones/revistas/hpe/227_Art3.pdf (application/pdf)
Related works:
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: https://EconPapers.repec.org/RePEc:hpe:journl:y:2018:v:227:i:4:p:63-101
Access Statistics for this article
More articles in Hacienda Pública Española / Review of Public Economics from IEF Contact information at EDIRC.
Bibliographic data for series maintained by Miguel Gómez de Antonio ().