Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/237954 
Year of Publication: 
2020
Series/Report no.: 
ESRI Working Paper No. 683
Publisher: 
The Economic and Social Research Institute (ESRI), Dublin
Abstract: 
Data from member states' Stability and Convergence Programmes from 2011 to 2018 are used to assess the cyclicality of government consumption in the EU after the European Semester took effect. Econometric estimations, which address endogeneity issues, find the intended (ex-ante) fiscal policy to be pro-cyclical in nature. Government consumption is also found to be pro-cyclical ex-post but to a much lesser extent than ex-ante. This appears to be largely owing to a forecasting bias on the part of official forecasters occurring, despite the purported improvements to EU member states' surveillance and forecasting mechanisms that have been put in place in recent years to address such bias.
Subjects: 
Cyclicality of fiscal policy
forecasting bias
European Semester
JEL: 
C23
E62
H68
Document Type: 
Working Paper

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