Arbeitspapier
Procyclicality or reverse causality?
There is a large literature showing that fiscal policy is either acyclical or countercyclical in industrial countries and procyclical in developing countries. Most of this literature is based on OLS regressions that focus on the correlation between a fiscal variable (usually the budget balance or expenditure growth) and either GDP growth or some measure of the output gap. This paper argues that such a methodology does not permit the identification of the effect of the business cycle on fiscal policy and hence cannot be used to estimate policy reaction functions. The paper proposes a new instrument for GDP growth and shows that, once GDP growth is properly instrumented, procyclicality tends to disappear.
- Sprache
-
Englisch
- Erschienen in
-
Series: Working Paper ; No. 599
- Klassifikation
-
Wirtschaft
Fiscal Policy
Business Fluctuations; Cycles
National Deficit; Surplus
- Thema
-
Fiscal Policy
Business Cycle
Emerging Markets
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Jaimovich, Dany
Panizza, Ugo
- Ereignis
-
Veröffentlichung
- (wer)
-
Inter-American Development Bank, Research Department
- (wo)
-
Washington, DC
- (wann)
-
2007
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:46 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Jaimovich, Dany
- Panizza, Ugo
- Inter-American Development Bank, Research Department
Entstanden
- 2007
Ähnliche Objekte (12)
Reverse causality in global current accounts
Asymptotic bias of OLS in the presence of reverse causality
Reverse causality between oil policy and fiscal policy? The Venezuelan experience
Econometric causality
Econometric causality
Economic discrimination and cultural differences as barriers to migrant integration: Is reverse causality symmetric?
Causality and Econometrics
Determinants of Stock Market Correlation. Accounting for Model Uncertainty and Reverse Causality in a Large Panel Setting
Simultaneous causality in international trade
A Simple Test for Causality in Volatility
Time and causality in the social sciences
Granger-Causality and Policy Ineffectiveness: A Rejoinder
Reverse causality in global current accounts
Asymptotic bias of OLS in the presence of reverse causality
Reverse causality between oil policy and fiscal policy? The Venezuelan experience
Econometric causality
Econometric causality
Economic discrimination and cultural differences as barriers to migrant integration: Is reverse causality symmetric?
Causality and Econometrics
Determinants of Stock Market Correlation. Accounting for Model Uncertainty and Reverse Causality in a Large Panel Setting
Simultaneous causality in international trade
A Simple Test for Causality in Volatility
Time and causality in the social sciences
Granger-Causality and Policy Ineffectiveness: A Rejoinder
Reverse causality in global current accounts
Asymptotic bias of OLS in the presence of reverse causality
Reverse causality between oil policy and fiscal policy? The Venezuelan experience
Econometric causality
Econometric causality
Economic discrimination and cultural differences as barriers to migrant integration: Is reverse causality symmetric?
Causality and Econometrics
Determinants of Stock Market Correlation. Accounting for Model Uncertainty and Reverse Causality in a Large Panel Setting
Simultaneous causality in international trade
A Simple Test for Causality in Volatility
Time and causality in the social sciences