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Procyclical and Countercyclical Fiscal Policies in Non-Euro EU Member Countries

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  • Aurel IANCU

    (National Institute for Economic Research of the Romanian Academy.)

  • Dan Constantin OLTEANU

    (National Institute for Economic Research of the Romanian Academy.)

Abstract

The aim of this study is to determine the nature of the discretionary fiscal policy practiced by the non-euro EU member states, namely to deduce some bias for one of the two types of fiscal policies - procyclical or countercyclical. For this purpose, we used time series for the period 1995-2020, of the cyclically-adjusted primary balance, the output gap, as well as additional indicators - public debt, fiscal rules index and election years. From the signs and magnitude of the correlation and regression coefficients, it results that almost all countries have learned the necessary lessons from the economic / financial crisis, in order to move from a procyclical policy, during 1995-2008, to a countercyclical policy, in 2009-2020.

Suggested Citation

  • Aurel IANCU & Dan Constantin OLTEANU, 2022. "Procyclical and Countercyclical Fiscal Policies in Non-Euro EU Member Countries," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 188-205, October.
    • Handle: RePEc:rjr:romjef:v::y:2022:i:3:p:188-205
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    Cited by:

    1. Aurel IANCU & Dan Constantin OLTEANU, 2022. "Procyclical and Countercyclical Fiscal Policies in Non-Euro EU Member Countries," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 188-205, October.

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    More about this item

    Keywords

    discretionary fiscal policy; fiscal reaction function; procyclicality; countercyclicality; economic cycl;
    All these keywords.

    JEL classification:

    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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