Modelling the Fiscal Reaction Functions of the GIPS Based on State-Varying Thresholds

We extend previous literature on fiscal policy sustainability by introducing non-linear fiscal reaction functions with endogenously estimated state-varying thresholds to capture the behaviour of fiscal policy authorities during “good” and “bad” times. These thresholds vary with the level of debt, the economic cycle and an index of financial pressure.

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Year of publication:	2013
Authors:	Legrenzi, Gabriella Deborah ; Milas, Costas
Institutions:	CESifo
Subject:	debt sustainability \| fiscal reaction function \| state-varying threshold

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Extent:	application/pdf
Series:	CESifo Working Paper Series.
Type of publication:	Book / Working Paper
Notes:	Number 4385
Classification:	C20 - Econometric Methods: Single Equation Models. General ; H30 - Fiscal Policies and Behavior of Economic Agents. General ; H50 - National Government Expenditures and Related Policies. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010691461