Fiscal regimes in the EU

Antonio Afonso and C. Priscilla Toffano

No 1529, Working Paper Series from European Central Bank

Abstract: We assess the existence of fiscal regime shifts in the U.K., Germany, and Italy, using Markov switching fiscal rules. On the basis of a newly built quarterly data set, our results show the existence of fiscal regimes shifts, sometimes coupled with regime switches also regarding monetary developments. While in the UK “active” and “passive” (Leeper, 1991) fiscal regimes are somewhat clearer cut, in Germany fiscal regimes have been overall less active, supporting more fiscal sustainability. For Italy, a more passive fiscal behaviour is uncovered in the run-up to EMU. JEL Classification: C22, E62, H62

Keywords: EU; fiscal regimes; Markov-switiching (search for similar items in EconPapers)
Date: 2013-04
New Economics Papers: this item is included in nep-eec and nep-pbe
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Citations: View citations in EconPapers (13)

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Related works:
Working Paper: Fiscal regimes in the EU (2013)
Working Paper: Fiscal regimes in the EU (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20131529

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