Year: 2012
Type: conference-paper
Abstract: In this paper, we address the measurement and analysis of credibility in fiscal policy. In many instances, fiscal policy, as conducted by governments, is not perceived as credible because the targets set forward by the government are often not met. Usually, the divergence is on the negative side. Taxes are overestimated and spending is underestimated, leading to a deficit bias and growing indebtedness of governments. This paper focuses on a measure of credibility that builds on the deviations of the actual budget balances from the projections about these balances in the preceding year for the EU member states over the period 1999–2009. The objectives are to extract from these data insights into the credibility of these governments’ fiscal policies and explain credibility using a number of political determinants.
Authors: Frank Naert, Stijn Goeminne
Institution: HOGENT University of Applied Sciences and Arts
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2279026164