2004), “Cyclical Asymmetry in Fiscal Policy, Debt Accumulation and the Treaty of Maastricht”, Temi di discussione

In this paper we present a stylised framework of fiscal policy determination which considers both structural targets and cyclical factors. Applying this framework to a sample of 16 OECD countries we find evidence of significant asymmetry in the reaction of fiscal policy to positive and negative cyclical conditions, with budgetary balances deteriorating in contractions and not improving in expansions. This asymmetry appears to have contributed significantly to debt accumulation. We find no evidence that EU fiscal rules have reduced the ability of governments to conduct stabilisation policy