Economics at your fingertips  

What determines fiscal balances? An empirical investigation in determinants of changes in OECD budget balances

Mika Tujula and Guido Wolswijk ()

No 422, Working Paper Series from European Central Bank

Abstract: Fiscal balances have deteriorated quickly in recent years, bringing back to the foreground the question what factors help explain such sharp changes. This paper takes a broad perspective at the issue regarding countries included, the range of explanatory variables tried, and the time-span. The empirical analysis shows that changes in budget balances are affected by debt growth, macroeconomic developments and political factors. In particular, we find that the run-up to EMU induced additional consolidation in Europe and that budget balances deteriorate markedly in election years. Asset prices also may affect budgets, but the impact remains limited in normal times. JEL Classification: E61, E62, H61, H62

Keywords: Asset Prices; budget balance; economic growth; fiscal policy; Stability and Growth Pact. (search for similar items in EconPapers)
Date: 2004-12
Note: 339133
References: Add references at CitEc
Citations: View citations in EconPapers (24) Track citations by RSS feed

Downloads: (external link) (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:

Access Statistics for this paper

More papers in Working Paper Series from European Central Bank 60640 Frankfurt am Main, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Official Publications ().

Page updated 2022-01-15
Handle: RePEc:ecb:ecbwps:2004422