{"id":1653,"date":"2015-04-09T10:30:11","date_gmt":"2015-04-09T10:30:11","guid":{"rendered":"http:\/\/www.asimmetrie.org\/?p=1653"},"modified":"2023-10-12T10:00:36","modified_gmt":"2023-10-12T09:00:36","slug":"wp-201501-membership-in-the-euro-area-and-fiscal-sustainability","status":"publish","type":"publication","link":"https:\/\/asimmetrie.org\/en\/pubblicazioni\/wp-201501-membership-in-the-euro-area-and-fiscal-sustainability\/","title":{"rendered":"WP 2015\/01: Membership in the euro area and fiscal sustainability. Analysis through panel fiscal reaction functions"},"content":{"rendered":"

We estimate various panel fiscal reaction functions, including those of main categories of general government revenue and expenditure for 12 Euro area member states over the 1970-2013 period. We find that in the peripheral countries where sovereign bond yields decreased sharply in the years 1996-2007, fiscal stance ceased to respond to sovereign debt accumulation. This was due to lack of sufficient adjustment in government non-investment expenditure and direct taxes. In contrast, in the core member states, which did not benefit from yields\u2019 convergence related to the Euro area establishment, responsiveness of fiscal stance to sovereign debt increased during 1996-2007. It was achieved mainly through pronounced adjustments in government non-investment expenditure. Our findings are in accordance with predictions of theoretical model by Aguiar et al. (2014) and are robust to various changes in modelling approach.<\/p>\n

Piotr Ci\u017ckowicz<\/em>
\n Warsaw School of Economics<\/em><\/p>\n

Andrzej Rzo\u0144ca<\/em>
\n Warsaw School of Economics\u00a0and
\nMonetary Policy Council in the National Bank of Poland<\/em><\/p>\n

Rafa\u0142 Trzeciakowski<\/em>
\n Warsaw School of Economics<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

We estimate various panel fiscal reaction functions, including those of main categories of general government revenue and expenditure for 12 Euro area member states over […]<\/p>\n","protected":false},"featured_media":8195,"template":"","tags":[],"topic":[],"publications_category":[14],"expert":[442,394,395],"class_list":["post-1653","publication","type-publication","status-publish","has-post-thumbnail","hentry","publications_category-working-papers","expert-andrzej-rzonca","expert-piotr-cizkowicz","expert-rafal-trzeciakowski"],"acf":[],"yoast_head":"\nWP 2015\/01: Membership in the euro area and fiscal sustainability. Analysis through panel fiscal reaction functions – a\/simmetrie<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/asimmetrie.org\/en\/pubblicazioni\/wp-201501-membership-in-the-euro-area-and-fiscal-sustainability\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"WP 2015\/01: Membership in the euro area and fiscal sustainability. 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