Publicação
The determinants of the volatility of fiscal policy discretion
| Resumo: | We investigate the determinants of the volatility of fiscal policy discretion. Using a linear dynamic panel dataset model for 104 countries from 1980 to 2006 and a system-GMM estimator,we find that more government instability, less democracy and presidentialist systems increase the volatility of the discretionary component of fiscal policy. Additionally, we show that countries with a larger size, a smaller degree of financial openness, and a stable exchange rate system are more insured against the uncertainty about the conduct of fiscal policy. Our results are robust to various regional dummy variables, diferent sub-sets of countries and the presence of high inflation and crisis episodes. |
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| Autores principais: | Agnello, Luca |
| Outros Autores: | Sousa, Ricardo M. |
| Assunto: | Fiscal policy discretion Volatility Political instability Institutional framework Macroeconomy E63 E31 Ciências Sociais::Economia e Gestão E: Macroeconomics and Monetary Economics::E6: Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook::E63: Comparative or Joint Analysis of Fiscal and Monetary Policy • Stabilization • Treasury Policy E: Macroeconomics and Monetary Economics::E3: Prices, Business Fluctuations, and Cycles::E31: Price Level • Inflation • Deflation |
| Ano: | 2014 |
| País: | Portugal |
| Tipo de documento: | artigo |
| Tipo de acesso: | acesso aberto |
| Instituição associada: | Universidade do Minho |
| Idioma: | inglês |
| Origem: | RepositóriUM - Universidade do Minho |
| Resumo: | We investigate the determinants of the volatility of fiscal policy discretion. Using a linear dynamic panel dataset model for 104 countries from 1980 to 2006 and a system-GMM estimator,we find that more government instability, less democracy and presidentialist systems increase the volatility of the discretionary component of fiscal policy. Additionally, we show that countries with a larger size, a smaller degree of financial openness, and a stable exchange rate system are more insured against the uncertainty about the conduct of fiscal policy. Our results are robust to various regional dummy variables, diferent sub-sets of countries and the presence of high inflation and crisis episodes. |
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