Invited Paper

Share |

Posted on 04 July 2013

Dr Gabriella Legrenzi, Economics & Finance, has been invited to present a paper at the 2nd time series workshop organised by RCEA.

Her paper "Estimating Fiscal Reaction Functions with Time and State-Varying Parameters", joint with Costas Milas (Liverpool University), models the reaction of fiscal policy authorities to budgetary disequilibria, for the case of the GIPS (Greece, Ireland, Portugal and Spain).

The paper shows that, in line with the theoretical predictions of political economy models, GIPS fiscal policy authorities correct budgetary disequilibria only when they become "too large".  Such threshold for correction is nevertheless lowered during periods of financial stress, uncovering further weaknesses in the GIPS' fiscal policy.

< back