Business cycle determinants and fiscal policy: A Panel ARDL approach for EMU

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• 作者：Theofanis Papageorgiou^a ; Panayotis G. Michaelides^a ; ^{pmichael@central.ntua.gr" class="auth_mail" title="E-mail the corresponding author} ; Efthymios G. Tsionas^b ; ^c
• 关键词：Fiscal policy ; Business cycles ; EMU ; Panel ARDL
• 刊名：The Journal of Economic Asymmetries
• 出版年：2016
• 出版时间：June 2016
• 年：2016
• 卷：13
• 期：Complete
• 页码：57-68
• 全文大小：717 K

文摘

In a monetary union, fiscal policy is probably the most important tool in dealing with country-specific fluctuations. This paper addresses some fundamental economic questions regarding the determinants of business cycles in the EMU in the time period 1995- 2012. More precisely, it acknowledges the significant role of fiscal policy and estimates relevant models for EMU countries where trade openness and other crucial variables are investigated. Various relevant econometric techniques have been employed, such as Panel ARDL. Social benefits are found to be the most important variable, whereas capital expenditures and indirect taxes are the major pro-cyclical variables. Furthermore, the formation of the EMU, along with the increasing trade openness, suggests a clear cut countercyclical effect. In other words, the common monetary policy and the deeper financial integration constitute reasons for the decrease in the magnitude of the fluctuations.