Euro membership and fiscal reaction functions : [Version 10 May 2013]

The paper uses fiscal reaction functions for a panel of euro-area countries to investigate whether euro membership has reduced the responsiveness of countries to shocks in the level of inherited debt compared to the peri
The paper uses fiscal reaction functions for a panel of euro-area countries to investigate whether euro membership has reduced the responsiveness of countries to shocks in the level of inherited debt compared to the period prior to succession to the euro. While we find some evidence for such a loss in prudence, the results are not robust to changes in the specification, such as an exclusion of Greece from the panel. This suggests that the current debt problems may result to a large extent from preexisting debt levels prior to entry or from a larger need for fiscal prudence in a common currency, while an adverse change in the fiscal reaction functions for most countries does not apply.
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Metadaten
Author:Alfons J. Weichenrieder, Jochen Zimmer
URN:urn:nbn:de:hebis:30:3-305718
URL:http://ssrn.com/abstract=2265312
DOI:http://dx.doi.org/10.2139/ssrn.2265312
Parent Title (German):SAFE working paper series ; No. 18
Series (Serial Number):SAFE working paper series (18)
Place of publication:Frankfurt am Main
Document Type:Working Paper
Language:English
Year of Completion:2013
Year of first Publication:2013
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2013/06/27
Tag:debt sustainability; euro area; fiscal reaction function
Issue:Version 10 May 2013
Pagenumber:29
HeBIS PPN:348829981
Institutes:Wirtschaftswissenschaften
House of Finance (HoF)
Center for Financial Studies (CFS)
Dewey Decimal Classification:330 Wirtschaft
JEL-Classification:E62 Fiscal Policy
H62 Deficit; Surplus
Sammlungen:Universitätspublikationen
Licence (German):License Logo Veröffentlichungsvertrag für Publikationen

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