Heterogeneity in the Fiscal Reaction Function. An Empirical Analysis for EU Member States

Bökemeier B, Stoian A, Dumitrescu B-A, Cepoi C (2020) Universität Bielefeld Working Papers in Economics and Management; 08-2020.
Bielefeld: Bielefeld University, Department of Business Administration and Economics.

Diskussionspapier | Veröffentlicht | Englisch
 
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Bökemeier, BettinaUniBi; Stoian, Andreea; Dumitrescu, Bogdan-Andrei; Cepoi, Cosmin
Abstract / Bemerkung
This paper studies heterogeneity in the fiscal reaction function for European Union members by resorting to the unconditional quantile regression estimation. Based on annual observations for the years from 2005 to 2018 it shows that the level of the covariates is relevant for the heterogenous response measured in terms of the cyclically adjusted primary balance. First, a positive reaction to different levels of debt is visible, which becomes weaker as the debt ratio rises. This indicates sustainable behaviour that peters out for higher indebtedness. Moreover, the fiscal position is poorer in countries with higher life-expectancy and governments seem to run more pronounced pro-cyclical fiscal policy during bad times. These problems question current as well as future policy design particularly against the background of the recent pandemic situation putting additional social and financial burden on the countries. In addition, the level of development matters for the response pattern and the reaction is stronger indicating more fiscal discipline in less developed countries. Finally, our estimations show that the fiscal position improves with the level of educational attainment and the external position.
Stichworte
Fiscal response function; Heterogeneity; Fiscal sustainability; Unconditional quantile regression
Erscheinungsjahr
2020
Band
08-2020
Seite(n)
8
ISSN
2196-2723
Page URI
https://pub.uni-bielefeld.de/record/2949328

Zitieren

Bökemeier B, Stoian A, Dumitrescu B-A, Cepoi C. Heterogeneity in the Fiscal Reaction Function. An Empirical Analysis for EU Member States. Universität Bielefeld Working Papers in Economics and Management. Vol 08-2020. Bielefeld: Bielefeld University, Department of Business Administration and Economics; 2020.
Bökemeier, B., Stoian, A., Dumitrescu, B. - A., & Cepoi, C. (2020). Heterogeneity in the Fiscal Reaction Function. An Empirical Analysis for EU Member States (Universität Bielefeld Working Papers in Economics and Management, 08-2020). Bielefeld: Bielefeld University, Department of Business Administration and Economics. doi:10.4119/unibi/2949328
Bökemeier, B., Stoian, A., Dumitrescu, B. - A., and Cepoi, C. (2020). Heterogeneity in the Fiscal Reaction Function. An Empirical Analysis for EU Member States. Universität Bielefeld Working Papers in Economics and Management, 08-2020, Bielefeld: Bielefeld University, Department of Business Administration and Economics.
Bökemeier, B., et al., 2020. Heterogeneity in the Fiscal Reaction Function. An Empirical Analysis for EU Member States, Universität Bielefeld Working Papers in Economics and Management, no.08-2020, Bielefeld: Bielefeld University, Department of Business Administration and Economics.
B. Bökemeier, et al., Heterogeneity in the Fiscal Reaction Function. An Empirical Analysis for EU Member States, Universität Bielefeld Working Papers in Economics and Management, vol. 08-2020, Bielefeld: Bielefeld University, Department of Business Administration and Economics, 2020.
Bökemeier, B., Stoian, A., Dumitrescu, B.-A., Cepoi, C.: Heterogeneity in the Fiscal Reaction Function. An Empirical Analysis for EU Member States. Universität Bielefeld Working Papers in Economics and Management, 08-2020. Bielefeld University, Department of Business Administration and Economics, Bielefeld (2020).
Bökemeier, Bettina, Stoian, Andreea, Dumitrescu, Bogdan-Andrei, and Cepoi, Cosmin. Heterogeneity in the Fiscal Reaction Function. An Empirical Analysis for EU Member States. Bielefeld: Bielefeld University, Department of Business Administration and Economics, 2020. Universität Bielefeld Working Papers in Economics and Management. 08-2020.
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