Assessing Long-Term Fiscal Developments: Evidence from Portugal

Antonio Afonso and Ricardo Sousa

No 2009/03, Working Papers Department of Economics from ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa

Abstract: Drawing on quarterly data for Portugal, we use a Three-Stage Least Square method and a system of equations to recursively estimate two components of fiscal policy – responsiveness and persistence – and to infer about the sources of fiscal deterioration (improvement). The results suggest that: (i) government spending exhibits higher persistence than government revenue; and (ii) government revenue is more responsive to the business cycle than government spending.

Keywords: Fiscal deterioration; Portugal. (search for similar items in EconPapers)
JEL-codes: E62 H50 (search for similar items in EconPapers)
Date: 2009-01
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Assessing long-term fiscal developments: evidence from Portugal (2011)
Working Paper: Assessing Long-Term Fiscal Developments: Evidence from Portugal (2009)
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