Assessing long-term fiscal developments - a new approach

Antonio Afonso, Davide Furceri, Luca Agnello () and Ricardo Sousa

No 1032, Working Paper Series from European Central Bank

Abstract: We use a new approach to assess long-term fiscal developments. By analyzing the time varying behaviour of the two components of government spending and revenue - responsiveness and persistence - we are able to infer about the sources of fiscal behaviour. Drawing on quarterly data we estimate recursively these components within a system of government revenue and spending equations using a Three-Stage Least Square method. In this way we track fiscal developments, i.e. possible fiscal deteriorations and/or improvements for eight European Union countries plus the US. Results suggest that positions have not significantly changed for Finland, France, Germany, Spain, the United Kingdom and the US, whilst they have improved for Belgium, Italy, and the Netherlands. JEL Classification: E62, H50

Keywords: Fiscal Deterioration; fiscal sustainability (search for similar items in EconPapers)
Date: 2009-03
New Economics Papers: this item is included in nep-cba, nep-eec and nep-mac
Note: 1145200
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Related works:
Journal Article: Assessing long-term fiscal developments: A new approach (2011)
Working Paper: Assessing Long-Term Fiscal Developments: a New Approach (2009)
Working Paper: Assessing Long-Term Fiscal Developments: a New Approach (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20091032

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