Cover IMF Working Papers
Fiscal Politics in the Euro Area
Author: Luc Eyraud, Vitor Gaspar, and Mr. Tigran Poghosyan
Series:
IMF Working Papers
Volume/Issue:
Volume 2017: Issue 018
Language:
English
Publication Date:
30 Jan 2017
DOI:
https://doi.org/10.5089/9781475572919.001
ISBN:
9781475572919
ISSN:
1018-5941
Pages:
44
Keywords:
WP; output gap; financial crisis; political economy factors; deficit bias; procyclicality; fiscal rules; policy bias; country size; debt ratio; EDP country; documents policy bias; country differentiation; discretionary fiscal policy; sample of EA country; fiscal policy coordination; reaction result; government yields of EA country; potential GDP; Fiscal stance; Fiscal governance; Global; Europe
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper provides evidence of fiscal procyclicality, excessive deficits, distorted budget composition and poor compliance with fiscal rules in the euro area. Our analysis relies on real-time data for 19 countries participating in the euro area over 1999–2015. We look for, but do not find, conclusive evidence of bias in procedures in relation to country size. The paper also briefly reviews the literature on political economy factors and policy biases, and offers some reflections on the euro area architecture.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund