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US fiscal dynamics in political perspective
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Orientador(es)
Resumo(s)
Given the importance of fiscal balance for ensuring a sustainable fiscal policy, we
conduct an empirical examination of fiscal dynamics in the United States in response to
unsustainable budget deviations. We concentrate on the role of political factors, namely the
Republican - Democrat presidential divide, in determining the fiscal response to budget
disequilibria. Making use of an asymmetric cointegration framework, we explore politically
motivated fiscal asymmetries in the US, from Eisenhower to Obama. We conclude that
political factors such as the government’s political quadrant and the timing of elections are
important determinants of the fiscal response to unsustainable budget deviations.
Descrição
Palavras-chave
Fiscal Political Cointegration Asymmetric