Decomposing Budget Balances for Austria

Abstract

Brandner, Diebalek and Köhler-Töglhofer assess fiscal policy in Austria over the period 1976-2004 by decomposing the observed budget balance into: a core balance, estimated by means of an unobserved components model; the effect of automatic fiscal stabilizers (as calculated by the European Commission); the impact of discretionary policy responses to the business cycle, econometrically estimated; and a residual.