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Is Fiscal Policy Procyclical in the Euro Area?
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Florence Huart
Published/Copyright:
November 30, 2019
Abstract
We test the relationship between the cyclically adjusted primary balance and alternative indicators of cyclical conditions for the euro area and 18 OECD countries over the period 1970-2009. A countercyclical stance of discretionary fiscal policy is found during bad times after 1999 in the euro area as a whole and in a few member countries only (France, Ireland and The Netherlands). It is also associated with high public deficits or low public debts. There is no significant case of procyclical fiscal policy after 1999, neither in good times nor in bad times.
Keywords: Cyclical behaviour of discretionary fiscal policy; procyclical bias; countercyclical fiscal stance
Published Online: 2019-11-30
Published in Print: 2013-02-01
© 2019 by Walter de Gruyter Berlin/Boston
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Articles in the same Issue
- Editorial
- The Case of European Monetary Integration and its Former Hegemon
- Default of Systemically Important Financial Intermediaries: Short-term Stability versus Incentive Compatibility?
- Controlled Dismantlement of the Eurozone: A Strategy to Save the European Union and the Single European Market
- Writing Clearly: The ECB’s Monetary Policy Communication
- Is Fiscal Policy Procyclical in the Euro Area?
- Optimal Liquidity Provision Through a Demand Deposit Scheme: The Jacklin Critique Revisited
- Index: Volume 13, 2012
- Acknowledgements
Keywords for this article
Cyclical behaviour of discretionary fiscal policy;
procyclical bias;
countercyclical fiscal stance
Articles in the same Issue
- Editorial
- The Case of European Monetary Integration and its Former Hegemon
- Default of Systemically Important Financial Intermediaries: Short-term Stability versus Incentive Compatibility?
- Controlled Dismantlement of the Eurozone: A Strategy to Save the European Union and the Single European Market
- Writing Clearly: The ECB’s Monetary Policy Communication
- Is Fiscal Policy Procyclical in the Euro Area?
- Optimal Liquidity Provision Through a Demand Deposit Scheme: The Jacklin Critique Revisited
- Index: Volume 13, 2012
- Acknowledgements
