Fiscal Sustainability Across Government Tiers

XREAP Working Paper No. 2007-14

34 Pages Posted: 25 May 2011

See all articles by Peter Claeys

Peter Claeys

Vrije Universiteit Brussel (VUB) - Faculty of Economic, Social and Political Sciences; European University Institute - Economics Department (ECO)

Raul Ramos

University of Barcelona - AQR; IZA Institute of Labor Economics

Jordi Suriñach

AQR-IREA

Multiple version iconThere are 2 versions of this paper

Date Written: December 1, 2007

Abstract

This paper analyses how fiscal adjustment comes about when both central and sub-national governments are involved in consolidation. We test sustainability of public debt with a fiscal rule for both the federal and regional government. Results for the German Länder show that lower tier governments bear a relatively smaller part of the burden of debt consolidation, if they consolidate at all. Most of the fiscal adjustment occurs via central government debt. In contrast, both the US federal and state levels contribute to consolidation of public finances.

Keywords: Fiscal policy, fiscal rules, EMU, SGP, fiscal federalism

JEL Classification: E61, E62, H11, H72, H77

Suggested Citation

Claeys, Peter and Ramos, Raul and Suriñach, Jordi, Fiscal Sustainability Across Government Tiers (December 1, 2007). XREAP Working Paper No. 2007-14, Available at SSRN: https://ssrn.com/abstract=1847564 or http://dx.doi.org/10.2139/ssrn.1847564

Peter Claeys (Contact Author)

Vrije Universiteit Brussel (VUB) - Faculty of Economic, Social and Political Sciences ( email )

Ave. Franklin D Roosevelt, 50 - C.P. 191
B-1050 Brussels
Belgium

European University Institute - Economics Department (ECO) ( email )

Villa San Paolo
Via della Piazzuola 43
50133 Florence
Italy

Raul Ramos

University of Barcelona - AQR ( email )

Dpt. Econometrics, Statistics and Spanish Economy
Avda. Diagonal 690
Barcelona, Barcelona 08034
Spain

HOME PAGE: http://www.raulramos.cat

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Jordi Suriñach

AQR-IREA ( email )

Barcelona
Spain

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
64
Abstract Views
1,458
Rank
622,763
PlumX Metrics