Appraising fiscal reaction functions

We estimate fiscal responses for an OECD panel, accounting for cross-country interactions, and also estimate the fiscal responses in a panel VAR. We find that governments have increased primary balances when facing higher government indebtedness, implying a Ricardian fiscal regime, while primary balances have improved to reduce government debt. These results hold for the single regression panel analysis and for the panel VAR.

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Year of publication:	2011
Authors:	Afonso, António ; Jalles, João
Published in:	Economics Bulletin. - AccessEcon, ISSN 1545-2921. - Vol. 31.2011, 4, p. 3320-3330
Publisher:	AccessEcon
Subject:	fiscal regimes \| Panel VAR \| cross-sectional dependence

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Extent:	application/pdf
Type of publication:	Article
Language:	English
Classification:	H6 - National Budget, Deficit, and Debt ; C2 - Econometric Methods: Single Equation Models
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10009368586