Assessing Long-Term Fiscal Developments: Evidence from Portugal
NIPE Working Paper No. 1/2009
ISEG-UTL Economics Working Paper No. 03/2009/DE/UECE
10 Pages Posted: 24 Jan 2009 Last revised: 29 Jan 2009
There are 2 versions of this paper
Assessing Long-Term Fiscal Developments: Evidence from Portugal
Assessing Long-Term Fiscal Developments: Evidence from Portugal
Date Written: January 1, 2009
Abstract
Drawing on quarterly data for Portugal, we use a Three-Stage Least Square method and a system of equations to recursively estimate two components of fiscal policy - responsiveness and persistence - and to infer about the sources of fiscal deterioration (improvement). The results suggest that: (i) government spending exhibits higher persistence than government revenue; and (ii) government revenue is more responsive to the business cycle than government spending.
Keywords: fiscal deterioration, Portugal
JEL Classification: E62, H50
Suggested Citation: Suggested Citation
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