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LUCA AGNELLO

Fiscal policy responsiveness, persistence, and discretion

  • Autori: Afonso, A; Agnello, L; Furceri, D
  • Anno di pubblicazione: 2010
  • Tipologia: Articolo in rivista (Articolo in rivista)
  • Parole Chiave: Fiscal policy, fiscal volatility
  • OA Link: http://hdl.handle.net/10447/65647

Abstract

This paper analyzes the different characteristics of fiscal policy using a two-step estimation procedure. First, we decompose both government spending and government revenue into three components: responsiveness, persistence and discretion. Second, we assess the determinants of these characteristics. Using data from 132 countries, our results show that fiscal policy is more persistent than responsive to economic conditions, which implies that the authorities may have less leeway in the short-run notably to curb spending behavior. In addition, countries characterized by greater fiscal persistence have less discretion and responsiveness. Finally, macroeconomic, institutional and geographic variables explain cross-country variation in fiscal characteristics.