Assessing Long-Term Fiscal Developments: Evidence from Portugal
Posted: 25 Apr 2011
There are 2 versions of this paper
Assessing Long-Term Fiscal Developments: Evidence from Portugal
NIPE Working Paper No. 1/2009, ISEG-UTL Economics Working Paper No. 03/2009/DE/UECE
Number of pages: 10
Posted: 24 Jan 2009
Last Revised: 29 Jan 2009
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Date Written: March 2011
Abstract
We use a Three-Stage Least Square (TSLS) 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, pointing to fiscal deterioration issues.
Suggested Citation: Suggested Citation
Afonso, António and Sousa, Ricardo Magalhaes, Assessing Long-Term Fiscal Developments: Evidence from Portugal (March 2011). Applied Economics Letters, Vol. 18, No. 1, 2011, Available at SSRN: https://ssrn.com/abstract=1817746
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