Alberola Ila, Enrique
How cyclical do cyclically-adjusted balances remain ? an EU study / Enrique Alberola, José González Mínguez, Pablo Hernández de Cos, José M. Marqués .-- , 2003
Resumen. Conclusiones. Bibliografía
Observed budget balances are an imperfect indicator the fiscal stance, because fluctuations in economic activity induce automatic changes in the balance, hence the use of cyclically - adjusted balances (CAB). However, this paper shows that CABs (as measured through one of the two methods currently used bythe Commision) tend to be systematically overstimated during downturns and underestimated during expansion. The dominant source of this distortion arises from the filtering of revenues deemed to be cyclical, possibly signalling a problem with the computation of elasticities. The effect of the items which are assumed not to move with the cycle is non significant, but this overall result conceals offseting effects: public investment to be significantly procyclical and interestpayments and transfers to firms are countercyclical.
PRESUPUESTOS
POLITICA FISCAL
UNION EUROPEA
González Mínguez, José Manuel
Hernández de Cos, Pablo
Marqués Sevillano, José Manuel
Hacienda Pública Españolanº 166, p. 151-181
How cyclical do cyclically-adjusted balances remain ? an EU study / Enrique Alberola, José González Mínguez, Pablo Hernández de Cos, José M. Marqués .-- , 2003
Resumen. Conclusiones. Bibliografía
Observed budget balances are an imperfect indicator the fiscal stance, because fluctuations in economic activity induce automatic changes in the balance, hence the use of cyclically - adjusted balances (CAB). However, this paper shows that CABs (as measured through one of the two methods currently used bythe Commision) tend to be systematically overstimated during downturns and underestimated during expansion. The dominant source of this distortion arises from the filtering of revenues deemed to be cyclical, possibly signalling a problem with the computation of elasticities. The effect of the items which are assumed not to move with the cycle is non significant, but this overall result conceals offseting effects: public investment to be significantly procyclical and interestpayments and transfers to firms are countercyclical.
PRESUPUESTOS
POLITICA FISCAL
UNION EUROPEA
González Mínguez, José Manuel
Hernández de Cos, Pablo
Marqués Sevillano, José Manuel
Hacienda Pública Españolanº 166, p. 151-181