Publicação
Monetary policy easing and non-keynesian effects of fiscal policy
| Resumo: | This paper assesses the possible contribution of monetary expansions for the existence of expansionary fiscal consolidations, using annual panel data for 14 European Union countries over the period 1970-2019. The paper adopts a two-fold approach: it combines the usual CAPB approach used to identify fiscal consolidations with the narrative approach, and extends this approach to include dummy variables for identifying monetary expansions. A fiscal consolidation couple with a monetary expansion does produce little evidence of non-Keynesian effects, thus, monetary expansions does not contribute for the existence of expansionary fiscal consolidations. Moreover, Panel Probit estimations suggest monetary developments even contribute negatively for success of fiscal consolidations. For other success variables, duration and size contribute in a positive way and expenditure based consolidations lead to a decrease in debt to GDP ratio. |
|---|---|
| Autores principais: | Quaresma, Gonçalo Dias |
| Assunto: | fiscal consolidations fiscal episodes monetary expansion non Keynesian effects panel data probit |
| Ano: | 2021 |
| País: | Portugal |
| Tipo de documento: | dissertação de mestrado |
| Tipo de acesso: | acesso aberto |
| Instituição associada: | Universidade de Lisboa |
| Idioma: | português |
| Origem: | Repositório da Universidade de Lisboa |
| Resumo: | This paper assesses the possible contribution of monetary expansions for the existence of expansionary fiscal consolidations, using annual panel data for 14 European Union countries over the period 1970-2019. The paper adopts a two-fold approach: it combines the usual CAPB approach used to identify fiscal consolidations with the narrative approach, and extends this approach to include dummy variables for identifying monetary expansions. A fiscal consolidation couple with a monetary expansion does produce little evidence of non-Keynesian effects, thus, monetary expansions does not contribute for the existence of expansionary fiscal consolidations. Moreover, Panel Probit estimations suggest monetary developments even contribute negatively for success of fiscal consolidations. For other success variables, duration and size contribute in a positive way and expenditure based consolidations lead to a decrease in debt to GDP ratio. |
|---|