 Fiscal policy orientation in the euro area in real-timeKatja Schmidt and Antoine Sigwalt Working papers from Banque de France Abstract: This paper analyses the orientation of fiscal policy in the euro area in real-time, using a new real-time dataset including 11 euro area countries for the 1999-2019 period. We compare the cyclicality of the fiscal stance, measured as the change in the cyclically-adjusted total and primary budget balance, established during budgetary planning with their ex-post outturns. We find empirical evidence for pro-cyclical fiscal plans and a more a-cyclical behaviour of fiscal outcomes on average for euro area countries. We show hence that the tendency to run a pro-cyclical policy is already anchored in fiscal plans and not just an outcome of surprises on cyclical conditions. This result is robust to different specifications anDéestimation methods. We observe pro-cyclicality at budget planning especially during tightening episodes and a more a-cyclical fiscal stance during fiscal loosening. We also find that fiscal plans are pro-cyclical outside of crisis years of the Global Financial crisis and the European Debt crisis. We detect strong country heterogeneity in the orientation of fiscal policy ex-ante and ex-post in the euro area. Keywords: Fiscal Policy; Cyclicality; Real-Time Data; Fiscal Forecast. (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:bfr:banfra:896 Access Statistics for this paper More papers in Working papers from Banque de France Banque de France 31 Rue Croix des Petits Champs LABOLOG - 49-1404 75049 PARIS. Contact information at EDIRC. |
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