Final published version
Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
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TY - JOUR
T1 - Business cycle determinants and fiscal policy
T2 - a panel ARDL approach for EMU
AU - Papageorgiou, Theofanis
AU - Michaelides, Panayotis G.
AU - Tsionas, Efthymios
PY - 2016/6
Y1 - 2016/6
N2 - In a monetary union, fiscal policy is probably the most important tool in dealing with country-specific fluctuations. This paper addresses some fundamental economic questions regarding the determinants of business cycles in the EMU in the time period 1995- 2012. More precisely, it acknowledges the significant role of fiscal policy and estimates relevant models for EMU countries where trade openness and other crucial variables are investigated. Various relevant econometric techniques have been employed, such as Panel ARDL. Social benefits are found to be the most important variable, whereas capital expenditures and indirect taxes are the major pro-cyclical variables. Furthermore, the formation of the EMU, along with the increasing trade openness, suggests a clear cut countercyclical effect. In other words, the common monetary policy and the deeper financial integration constitute reasons for the decrease in the magnitude of the fluctuations.
AB - In a monetary union, fiscal policy is probably the most important tool in dealing with country-specific fluctuations. This paper addresses some fundamental economic questions regarding the determinants of business cycles in the EMU in the time period 1995- 2012. More precisely, it acknowledges the significant role of fiscal policy and estimates relevant models for EMU countries where trade openness and other crucial variables are investigated. Various relevant econometric techniques have been employed, such as Panel ARDL. Social benefits are found to be the most important variable, whereas capital expenditures and indirect taxes are the major pro-cyclical variables. Furthermore, the formation of the EMU, along with the increasing trade openness, suggests a clear cut countercyclical effect. In other words, the common monetary policy and the deeper financial integration constitute reasons for the decrease in the magnitude of the fluctuations.
KW - Fiscal policy
KW - Business cycles
KW - EMU
KW - Panel ARDL
U2 - 10.1016/j.jeca.2015.12.001
DO - 10.1016/j.jeca.2015.12.001
M3 - Journal article
VL - 13
SP - 57
EP - 68
JO - Journal of Economic Asymmetries
JF - Journal of Economic Asymmetries
SN - 1703-4949
ER -