Sensitivity of fiscal-policy effects to policy coordination and business cycle conditions

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Title: Sensitivity of fiscal-policy effects to policy coordination and business cycle conditions
ISBN: 978-952-6699-20-2
Author: Virén, Matti
Organization: Bank of Finland
Series: Bank of Finland Research Discussion Papers
ISSN: 1456-6184
Series year: 2013
Series number: 11/2013
Year of publication: 2013
Publication date: 24.6.2013
Published in: Published in International Economics and Economic Policy, September 2014, Volume 11, Issue 3: 397-411
DOI: 10.1007/s10368-013-0240-0
Pages: 24 s.
Keywords: finanssipolitiikka; suhdanteet; EMU; yhteistyö; julkinen talous; vajeet;
JEL: H62; E61; E63
Abstract: This paper deals with the problems of assessing the effects of fiscal policy in the European Monetary Union. Here, we face wide cross-country differences in key fiscal parameters, some of which may also be vary over time (business cycle). Moreover, these effects may also depend on trade spillover effects and thus on the extent of policy coordination. Our empirical analyses make use of data for 15 EU countries, mainly for the period 1970-2011. The results clearly indicate that fiscal multipliers are not constant across countries and time, being much larger during economic recessions. By contrast, the policy coordination-effects appear to be more homogenous, although it turns out that small countries may benefit more from coordination. Key words: Fiscal policy, policy coordination, government deficit, EMU Classification JEL: H62, E61, E63
Rights: https://helda.helsinki.fi/bof/copyright


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