Arbeitspapier
The effect of asymmetries in fiscal policy conducts on business cycle correlation in the EU
The paper examines the effects of asymmetries in fiscal policy conduct upon the correlation of business cycles in the European Union. In particular the paper estimates the effects of fiscal indiscipline and dissimilarity on business cycle correlation in the period 1996-2012 using a panel of 27 EU countries. The paper pays special attention to Central and Eastern European countries and examines the effects of interactions between fiscal policy measures and the fact that the country has not yet adopted the Euro. The results show a significant and robust negative effect of fiscal indiscipline and dissimilarity upon business cycle correlation in the EU. The paper also provides some evidence for the significance of intra-industry trade as well as of the interactions between fiscal measures and non-Euro area membership. The study provides arguments for fiscal policy harmonisation and fiscal discipline of the Euro area member as well as acceding countries, as undisciplined and dissimilar fiscal policies are shown as sources of business cycle deviations from the average European cycle.
- Language
-
Englisch
- Bibliographic citation
-
Series: WWWforEurope Working Paper ; No. 62
- Classification
-
Wirtschaft
Business Fluctuations; Cycles
Fiscal Policy
Economic Integration
- Subject
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European integration
Euro area
business cycle correlation
fiscal divergence
fiscal irresponsibility
optimum currency area
- Event
-
Geistige Schöpfung
- (who)
-
Rozmahel, Petr
Grochová, Ladislava
Litzman, Marek
- Event
-
Veröffentlichung
- (who)
-
WWWforEurope
- (where)
-
Vienna
- (when)
-
2014
- Handle
- Last update
-
10.03.2025, 11:46 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Rozmahel, Petr
- Grochová, Ladislava
- Litzman, Marek
- WWWforEurope
Time of origin
- 2014
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