The Effects Of Fiscal And Monetary Discipline On Budgetary Outcomes

Arbeitspapier

This paper extends the game-theoretic model of Von Hagen and Harden (1995) that analyzes the impact of fiscal discipline on budgetary outcomes.It analyzes the effects on budgetary outcomes of both fiscal and monetary discipline, which are evaluated with respect to the relevant institutional rules. The model predicts that while both inflation and budget deficits are negatively associated with fiscal discipline, they may be positively associated with monetary discipline, proxied by central bank independence. This result obtains due to optimizing agents who internalize the burden of spending: inflation. Although not conclusive due to data limitations, the empirical findings of the paper support these predictions.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Discussion Paper ; No. 2003/1

Classification and Topics

• Classification: Wirtschaft ; Bureaucracy; Administrative Processes in Public Organizations; Corruption ; Central Banks and Their Policies ; National Budget; Budget Systems ; State and Local Budget and Expenditures
• Subject: Budget Deficits ; Central Bank Independence ; Fiscal Discipline ; Inflation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Neyapti, Bilin
• Event: Veröffentlichung
• (who): Turkish Economic Association
• (where): Ankara
• (when): 2003

Further information

• Handle: http://hdl.handle.net/10419/83276
• Last update: 10.03.2025, 11:45 AM CET