PL EN


2005 | 52 | 12 | 937-959
Article title

Fiscal divergence and business cycle synchronization: irresponsibility is idiosyncratic.

Authors
Title variants
Languages of publication
HU
Abstracts
EN
Using panels of 115 countries of world - including 21 OECD countries - and 40 years of annual data, the authors find that countries with similar government budget positions tend to have business cycles that fluctuate more closely. Thus fiscal convergence (in the form of persistently similar ratios of government surplus/deficit to GDP) is systematically associated with more strongly synchronized business cycles. Evidence is also found that reduced fiscal deficits increase business-cycle synchronization. The Maastricht 'convergence criteria', used to determine eligibility for EMU, encouraged fiscal convergence and deficit reduction. So they may, indirectly, have moved Europe closer to an optimum currency area, by reducing countries' abilities to create idiosyncratic fiscal shocks. The empirical results of the study are economically and statistically significant, and robust.
Keywords
Year
Volume
52
Issue
12
Pages
937-959
Physical description
Document type
ARTICLE
Contributors
author
author
author
author
Gy.
  • Z. Darvas, no address given, contact the journal editor
References
Document Type
Publication order reference
Identifiers
CEJSH db identifier
07HUAAAA02955991
YADDA identifier
bwmeta1.element.27a84a24-7338-3ec0-a108-84e9a7e0b4fa
JavaScript is turned off in your web browser. Turn it on to take full advantage of this site, then refresh the page.