Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/173718
Authors: 
Kabashi, Rilind
Year of Publication: 
2016
Series/Report no.: 
Working Paper [2016-03]
Abstract: 
This study investigates the cyclical character of fiscal policy in transition countries in Central, Eastern and Southeastern Europe (CESEE) in the period from 1995 to 2011, using system GMM as the preferred estimation method for the underlying sample and model specification. The study finds discretionary policy in the CESEE EU Member States and in the Western Balkan countries to have been procyclical, thus aggravating economic fluctuations, whereas automatic stabilizers moved overall policy to an acyclical stance. In addition, the analysis indicates considerable differences in the cyclical character of fiscal policy between transition countries and the Western European EU Member States, where both overall fiscal policy and discretionary policy were acyclical. Finally, the study also offers several recommendations for policymakers, particularly in transition countries.
Subjects: 
fiscal policy
transition countries
European Union
system GMM
JEL: 
H62
E32
C33
Document Type: 
Working Paper

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