Fiscal Regime Shifts in Portugal

Antonio Afonso, Peter Claeys and Ricardo Sousa

No 2009/39, Working Papers Department of Economics from ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa

Abstract: We estimate changes in fiscal policy regimes in Portugal with a Markov Switching regression of fiscal policy rules for the period 1978-2007, using a new dataset of fiscal quarterly series. We find evidence of a deficit bias, while repeated reversals of taxes making the budget procyclical. Economic booms have typically been used to relax tax pressure, especially during elections. One-off measures have been preferred over structural ones to contain the deficit during economic crises. The EU fiscal rules prompted temporary consolidation, but did not permanently change the budgeting process. Key words: fiscal regimes, Markov Switching, Portugal

JEL-codes: E62 E65 H11 H62 (search for similar items in EconPapers)
Date: 2009-10
New Economics Papers: this item is included in nep-mac and nep-pbe
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Fiscal regime shifts in Portugal (2011)
Working Paper: Fiscal Regime Shifts in Portugal (2009)
Working Paper: Fiscal Regime Shifts in Portugal (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ise:isegwp:wp412009

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