Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/153476
Authors: 
Agnello, Luca
Sousa, Ricardo M.
Year of Publication: 
2009
Series/Report no.: 
ECB Working Paper 1042
Abstract: 
This paper empirically analyzes the political, institutional and economic sources of public deficit volatility. Using the system-GMM estimator for linear dynamic panel data models and a sample of 125 countries analyzed from 1980 to 2006, we show that higher public deficit volatility is typically associated with higher levels of political instability and less democracy. In addition, public deficit volatility tends to be magnified for small countries, in the outcome of hyper-inflation episodes and for countries with a high degree of openness.
Subjects: 
institutions
political instability
public deficit
Volatility
JEL: 
E31
E63
Document Type: 
Working Paper

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