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The determinants of the volatility of fiscal policy discretion

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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.
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

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