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Empirical Economics

, Volume 43, Issue 1, pp 199–217 | Cite as

Changes in the fiscal stance and the composition of public spending

  • Juraj Stančík
  • Timo VäliläEmail author
Article
  • 209 Downloads

Abstract

We consider the impact of both cyclical and structural changes in the fiscal stance on public spending composition for a panel of EU countries, including individual components of public investment. We find that both cyclically induced and structural changes in the fiscal stance affect the composition of public spending, with fiscal tightening of both types increasing the relative share of investment and loosening favouring consumption expenditure. Of the components of public investment, infrastructure and redistribution respond to cyclical changes in the fiscal stance, while investment in hospitals and schools responds most clearly to structural changes.

Keywords

Fiscal policy Public expenditure Fiscal stance 

JEL Classification

E62 H50 H62 C33 

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Copyright information

© Springer-Verlag 2011

Authors and Affiliations

  1. 1.CERGE-EI—Center for Economic Research and Graduate Education, Charles University, and the Economics Institute of the Academy of Sciences of the Czech RepublicPragueCzech Republic
  2. 2.Institute for Prospective Technological Studies (IPTS), European CommissionSevilleSpain
  3. 3.Economic and Financial Studies DivisionEuropean Investment BankLuxembourgLuxembourg

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