Abstract

http://ssrn.com/abstract=1484276
 
 

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Planning to Cheat: EU Fiscal Policy in Real Time


Roel M. W. J. Beetsma


University of Amsterdam - Research Institute in Economics & Econometrics (RESAM); Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); Tinbergen Institute - Tinbergen Institute Amsterdam (TIA); Netspar

Massimo Giuliodori


University of Amsterdam - Faculty of Economics & Econometrics (FEE); Tinbergen Institute - Tinbergen Institute Amsterdam (TIA)

Peter Wierts


De Nederlandsche Bank - Research Department


Economic Policy, Vol. 24, Issue 60, pp. 753-804, October 2009

Abstract:     
Using real-time data from Europe’s Stability and Convergence Programs, we explore how fiscal plans and their implementation in the EU are determined. We find that (1) implemented budgetary adjustment falls systematically short of planned adjustment and this shortfall increases with the projection horizon, (2) variability in the eventual fiscal outcomes is dominated by the implementation errors, (3) there is a limited role for ‘traditional’ political variables, (4) stock-flow adjustments are more important when plans are more ambitious, and (5), most importantly, both the ambition in fiscal plans and their implementation benefit from stronger national fiscal institutions. We emphasize also the importance of credible plans for the eventual fiscal outcomes.

Number of Pages in PDF File: 52

Accepted Paper Series


Date posted: October 8, 2009  

Suggested Citation

Beetsma, Roel M. W. J. and Giuliodori, Massimo and Wierts, Peter, Planning to Cheat: EU Fiscal Policy in Real Time. Economic Policy, Vol. 24, Issue 60, pp. 753-804, October 2009. Available at SSRN: http://ssrn.com/abstract=1484276 or http://dx.doi.org/10.1111/j.1468-0327.2009.00230.x

Contact Information

Roel M. W. J. Beetsma (Contact Author)
University of Amsterdam - Research Institute in Economics & Econometrics (RESAM) ( email )
Roetersstraat 11
Amsterdam
Netherlands
+31 20 525 5280 (Phone)
+31 20 525 4254 (Fax)
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
CESifo (Center for Economic Studies and Ifo Institute)
Poschinger Str. 5
Munich, DE-81679
Germany
HOME PAGE: http://www.CESifo.de
Tinbergen Institute - Tinbergen Institute Amsterdam (TIA) ( email )
Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands
Netspar ( email )
P.O. Box 90153
Tilburg, 5000 LE
Netherlands
Massimo Giuliodori
University of Amsterdam - Faculty of Economics & Econometrics (FEE) ( email )
Roetersstraat 11
Amsterdam, 1018 WB
Netherlands
Tinbergen Institute - Tinbergen Institute Amsterdam (TIA) ( email )
Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands
Peter Wierts
De Nederlandsche Bank - Research Department ( email )
P.O. Box 98
1000 AB Amsterdam
Netherlands

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References:  54
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