Kiel Working Papers, Kiel Institute for World Economics
No 1028:
Fiscal Consolidation in Europe: Pre- and Post-Maastricht
Christophe Kamps
Abstract: Based on a panel data model this paper investigates
whether the effects of fiscal policy on national saving in Europe have
changed after the Maastricht Treaty came into force. Recently Giavazzi,
Jappelli and Pagano (2000) found evidence that national saving responds
nonlinearly to fiscal policy when a large and persistent consolidation is
undertaken. I show that their finding is not robust, one reason being that
the structural budget deficit is not a time-invariant criterion for
identifying episodes of large and persistent fiscal impulses. This paper
proposes and analyses an alternative definition of a fiscal consolidation
episode: the post-Maastricht period.
Keywords: Fiscal policy, national saving, budgetary consolidation, European Union, panel; (follow links to similar papers)
JEL-Codes: E6; H2; H3; H5; H6; (follow links to similar papers)
24 pages, February 2001
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