Department of Economics
Villa San Paolo
Via della Piazzuolla 43
Tel: 39 0554685908
Institutional Affiliation: European University Institute
Information about this author at RePEc
NBER Working Papers and Publications
|June 2014||Fiscal Consolidation with Tax Evasion and Corruption|
in NBER International Seminar on Macroeconomics 2014, Richard Clarida, Jeffrey Frankel, Francesco Giavazzi, and Hélène Rey, organizers
|September 2006||Does it Cost to be Virtuous? The Macroeconomic Effects of Fiscal Constraints|
in NBER International Seminar on Macroeconomics 2004, Richard H. Clarida, Jeffrey Frankel, Francesco Giavazzi and Kenneth D. West, editors
|January 2005||Does it Cost to be Virtuous? The Macroeconomic Effects of Fiscal Constraints|
with : w11065
We study whether and how fiscal restrictions alter the business cycle features of macrovariables for a sample of 48 US states. We also examine the "typical" transmission properties of fiscal disturbances and the implied fiscal rules of states with different fiscal restrictions. Fiscal constraints are characterized with a number of indicators. There are similarities in second moments of macrovariables and in the transmission properties of fiscal shocks across states with different fiscal constraints. The cyclical response of expenditure differs in size and sometimes in sign, but heterogeneity within groups makes point estimates statistically insignificant. Creative budget accounting is responsible for the pattern. Implications for the design of fiscal rules and the reform of the Stability a...
Published: Canova, Fabio and Evi Pappa. "The Elusive Costs And The Immaterial Gains Of Fiscal Constraints," Journal of Public Economics, 2006, v90(8-9,Sep), 1391-1414.