changes in the fiscal stance and the composition of public spending

Juraj Stančík and Timo Valila
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Juraj Stančík: CERGE-EI Charles University Prague and Economics Institute of the Academy of Sciences of the Czech Republic

No 2010/2, Economic and Financial Reports from European Investment Bank, Economics Department

Abstract: We consider the impact of both cyclical and structural changes in the fiscal stance on public spending composition for a panel of EU countries, including individual components of public investment. We find that both cyclically-induced and structural changes in the fiscal stance affect the composition of public spending, with fiscal tightening of both types increasing the relative share of investment and loosening favouring consumption expenditure. Of the components of public investment, infrastructure and redistribution respond to cyclical changes in the fiscal stance, while investment in hospitals and schools responds most clearly to structural changes.

Keywords: fiscal policy; public expenditure; fiscal stance (search for similar items in EconPapers)
JEL-codes: C33 E62 H50 H62 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2010-03-12
New Economics Papers: this item is included in nep-pbe
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Related works:
Journal Article: Changes in the fiscal stance and the composition of public spending (2012)
Working Paper: Changes in the Fiscal Stance and the Composition of Public Spending (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:eibefr:2010_002

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