Publication
Apr 2009
This paper synthesizes fiscal Taylor rules and error correction models as two different ways of quantifying feedback from fiscal and economic conditions to fiscal policy decisions. Using quarterly post-war US data, estimates of a fiscal Taylor rule find that the government sector has sought to stabilize its debt through adjustments to purchases and taxes, in that order, with very little stabilization coming through adjustments to transfer payments.
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English (PDF, 27 pages, 432 KB) |
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Author | Christopher P Reicher |
Series | Kiel Institute Working Papers |
Issue | 1509 |
Publisher | Kiel Institute for the World Economy |
Copyright | © 2009 Kiel Institute for the World Economy |