Abstract
Research background: The crisis periods have highlighted the interdependence between individual European economies in the area of economic and fiscal development. The common development tendencies raise the question whether the fiscal indebtedness and preferred fiscal policy of V4 countries can be considered as interdepending. Considering this assumption, a possibility for implementing a similar type of consolidation in selected clusters of countries could be proposed.Purpose of the article: The research is, from the empirical point of view, focused on the analysis and comparison of primary balance indicator, analysis and assessment of fiscal measures (in identified fiscal episodes) and analysis of fiscal development intercorrelations using the dynamic conditional correlation approach.Methods: The empirical assessment of the research objective is, from the methodological point of view, divided into five phases: (1) the calculation of primary deficit indicator, (2) the analysis, comparison and assessment of the fiscal development in the V4 countries based on the annual primary deficit during the selected period 1999?2016, (3) the seasonal adjustment of performing time series and non-stationarity testing, (4) the dynamic conditional correlation approach (DCC) application. Within the analysis, the traditional and specific methods were used (time series analysis, content analysis, descriptive statistics, correlation methods, DCC approach).Findings & Value added: The results of the research suggest that between V4 countries do exist significant differences based on which cannot be clearly confirmed the assumption about the fiscal development interdependence in V4 countries. From the long-term perspective, it can be stated that the fiscal development in V4 countries is a very slightly positively related aspect, but in the context of the implementation of a common consolidation strategy it is not sufficient.
Highlights
Development of fiscal imbalance in the EU has been pointing to an increasing deficit slope since the 70's of the 20th century (European Commission, 2000)
In the development of the fiscal management are visible common development tendencies that raise the question whether the fiscal development, fiscal indebtedness and preferred fiscal policy of EU countries from the empirical point of view can be considered as interdepending
The main objective of the paper was to verify through selected methodology whether an interdependence in the primary balance development between V4 countries exists and so a common consolidation effort could be proposed
Summary
Development of fiscal imbalance in the EU has been pointing to an increasing deficit slope since the 70's of the 20th century (European Commission, 2000). Issues aimed at defining the type of fiscal consolidation, the determination of the specific components of one-side-oriented consolidation, and the determinants of individual components, came into the spotlight of a large part of the literature and empirical studies (Afonso & Jalles, 2016; Bröthaler & Getzner, 2015; Mirdala, 2013; Alesina & Ardagna, 2013; Nickel et al, 2010; Barrios et al, 2010; Guichard et al, 2007; OECD, 2007; etc.). The crisis periods highlighted an interdependence between individual economies and a conditionality of economic and fiscal development between the European countries. In the development of the fiscal management are visible common development tendencies that raise the question whether the fiscal development, fiscal indebtedness and preferred fiscal policy of EU countries from the empirical point of view can be considered as interdepending. The possibility of implementing a "similar" or "uniform" type of consolidation in countries (or cluster of countries) has to be considered
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: Equilibrium. Quarterly Journal of Economics and Economic Policy
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
