Badinger, Harald, Wolf Heinrich, Reuter. 2017. The case for fiscal rules. Economic Modelling, 60, 334-343.
BibTeX
Abstract
This paper estimates the effects of fiscal institutions on fiscal policy outcomes, addressing issues related to measurement and endogeneity in a novel way. Recently developed indices, based on partially ordered set theory, are used to quantify the stringency of fiscal rules. Identification of their effects is achieved by exploiting the exogeneity of institutional variables (checks and balances, government fragmentation, inflation targeting), which are found to be relevant determinants of fiscal rules. Our two-stage least squares estimates for (up to) 74 countries over the period 1985–2012 provide strong evidence that countries with more stringent fiscal rules have higher fiscal balances (lower deficits), lower interest rate spreads on government bonds, and lower output volatility.
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| Status of publication | Published |
|---|---|
| Affiliation | WU |
| Type of publication | Journal article |
| Journal | Economic Modelling |
| Citation Index | SSCI |
| WU Journalrating 2009 | A |
| Language | English |
| Title | The case for fiscal rules |
| Volume | 60 |
| Year | 2017 |
| Page from | 334 |
| Page to | 343 |
| Reviewed? | Y |
| DOI | http://dx.doi.org/10.1016/j.econmod.2016.09.028 |
| Open Access | N |
| JEL | E62; H30; H60 |
Associations
- People
- Badinger, Harald (Details)
- External
- Wolf Heinrich, Reuter (Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, Germany)
- Organization
- Institute for International Economics IN (Details)
- Research Institute for European Affairs FI (Details)
- Research areas (ÖSTAT Classification 'Statistik Austria')
- 5115 European integration (Details)
- 5323 Econometrics (Details)
- 5335 Political economic theory (Details)
- 5344 Foreign trade (Details)
- 5371 Macroeconomics (Details)