The political and institutional determinants of fiscal adjustments and expansions: Evidence for a large set of countries

Federico Giesenow*, Juliette Wit, de, Jakob Haan, de

*Corresponding author for this work

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2 Citations (Scopus)
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Abstract

Using annual data for 60 countries over 1980-2014, we study the drivers of fiscal adjustments, expansions, and their duration. In contrast to most previous studies, the identification of these fiscal events relies on breaks in their data generating process. Our findings suggest that a few political and institutional variables play a role in determining the occurrence and the duration of fiscal adjustments and expansions. The results also highlight the importance of analyzing the likelihood of fiscal events together with their persistence. Factors that do not affect the occurrence of fiscal adjustments or expansions may influence their persistence once initiated.

Original languageEnglish
Article number101911
Number of pages17
JournalEuropean Journal of Political Economy
Volume64
DOIs
Publication statusPublished - Sep-2020

Keywords

  • Fiscal expansions
  • Fiscal adjustments
  • Political economy
  • Government ideology
  • Multiple structural breaks
  • ECONOMIC-CONDITIONS
  • POLICY
  • CONSOLIDATION
  • DURATION
  • DEFICITS
  • QUALITY
  • EUROPE
  • MODELS

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