The Discretionary Fiscal Effort An Assessment of Fiscal Policy and its Output Effect Nicolas Carnot, Francisco de Castro
By: Carnot, Nicolas
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Contributor(s): Castro Fernández, Francisco de.
Material type: 
ArticlePublisher: 2015Subject(s): UNION EUROPEA | POLITICA FISCAL | EFECTO MULTIPLICADOROnline resources: Click here to access online
In:
Hacienda Pública Española n. 215 (4/2015), p. 63-94Summary: This paper presents an indicator of the fiscal stance that combines features of the bottom-up, narrative approach on the revenue side with a refined version of the top-down, traditional approach of the structural balance on the expenditure side. With these characteristics the indicator offers an image of fiscal policy that assuages the «endogeneity problems» of the structural balanceand avoids the «indeterminacy» of the narrative approach. This indicator is used to shed light on EU fiscal policies and estimate the average short-term outputeffects of fiscal policy. Results indicate that, with exceptions, fiscal policyhas been conducted in a more stop and go and pro-cyclical fashion over the pastdecade than suggested by traditional indicators. The fiscal multiplier is estimated at around 0.75 on average, with higher (resp. lower) multipliers associatedwith expenditure (resp. revenue) shocks, and higher (resp. lower) multipliers in times of declining (resp. increasing) output gaps.
| Item type | Current location | Home library | Call number | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
| IEF | HPE/2015/215-3 (Browse shelf) | Available | HPE/2015/215-3 |
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This paper presents an indicator of the fiscal stance that combines features of the bottom-up, narrative approach on the revenue side with a refined version of the top-down, traditional approach of the structural balance on the expenditure side. With these characteristics the indicator offers an image of fiscal policy that assuages the «endogeneity problems» of the structural balanceand avoids the «indeterminacy» of the narrative approach. This indicator is used to shed light on EU fiscal policies and estimate the average short-term outputeffects of fiscal policy. Results indicate that, with exceptions, fiscal policyhas been conducted in a more stop and go and pro-cyclical fashion over the pastdecade than suggested by traditional indicators. The fiscal multiplier is estimated at around 0.75 on average, with higher (resp. lower) multipliers associatedwith expenditure (resp. revenue) shocks, and higher (resp. lower) multipliers in times of declining (resp. increasing) output gaps.
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