The Relation Between the Cyclically Adjusted Budget Balance and the Growth Accounting Method of Deriving ‘Net Fiscal Effort’

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Title:The Relation Between the Cyclically Adjusted Budget Balance and the Growth Accounting Method of Deriving ‘Net Fiscal Effort’
Creators:
Zápal, Jan
Journal or Publication Title:
AUCO Czech Economic Review, 1, 3, pp. 324-335
Uncontrolled Keywords:expansionary/contractionary fiscal policy, cyclically adjusted budget balance, growth accounting, net fiscal effort

Abstract

This paper deals with the growth accounting method used to derive “net fiscal effort”. Net fiscal effort can then provide a clue about whether fiscal policy is expansionary or not, and, together with data on economic performance, can answer the question of the pro- or anti-cyclicality of the fiscal stance. Traditionally, the answer to such questions has been provided via the cyclically adjusted budget balance. I argue that the relatively computationally intensive and data demanding process of estimation of the cyclically adjusted budget balance can be replaced by the simple growth accounting method without significant loss of information. I argue that in the general case, the answers provided via the growth accounting method will not differ widely from the conclusions provided via the cyclically adjusted budget balance. I then illustrate the use of growth accounting on Czech fiscal data and compare the outcomes of both methods. The conclusions reached in the empirical part fit nicely with the conclusions of the theoretical part of the paper.

Official URL: http://www.ceeol.com/aspx/issuedetails.aspx?issueid=D4F9AADE-5C65-4E11-80F4-D34C7C0CD667&articleid=39724F6D-8EC6-4739-A440-DE53E10EC17E

Title:The Relation Between the Cyclically Adjusted Budget Balance and the Growth Accounting Method of Deriving ‘Net Fiscal Effort’
Creators:
Zápal, Jan
Uncontrolled Keywords:expansionary/contractionary fiscal policy, cyclically adjusted budget balance, growth accounting, net fiscal effort
Subjects:H Social Sciences > HB Economic Theory
H Social Sciences > HG Finance
H Social Sciences > HF Commerce
Divisions:Section of external journals > AUCO Czech Economic Review
Journal or Publication Title:AUCO Czech Economic Review
Volume:1
Number:3
Page Range:pp. 324-335
ISSN:1802-4696
Publisher:Charles University
Related URLs:
URLURL Type
http://auco.cuni.czPublisher
http://avi.lib.cas.cz/node/183Publisher
ID Code:4312
Item Type:Article
Deposited On:01 Jun 2009 18:32
Last Modified:01 Jun 2009 16:32

Citation

Zápal, Jan (2007) The Relation Between the Cyclically Adjusted Budget Balance and the Growth Accounting Method of Deriving ‘Net Fiscal Effort’. AUCO Czech Economic Review, 1 (3). pp. 324-335. ISSN 1802-4696

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