Fiscal discipline and exchange rates : does politics matter?

Detalhes bibliográficos
Autor(a) principal: Jalles, João Tovar
Data de Publicação: 2019
Outros Autores: Mulas-Granados, Carlos, Tavares, José
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: http://hdl.handle.net/10400.5/18768
Resumo: We look at the effect of exchange rate regimes on fiscal discipline, taking into account the effect of underlying political conditions. We present a model where strong politics (defined as policymakers facing longer political horizon and higher cohesion) are associated with better fiscal performance, but fixed exchange rates may revert this result and lead to less fiscal discipline. We confirm these hypotheses through regression analysis performed on a panel sample covering 79 countries from 1975 to 2012. Our empirical results also show that the positive effect of strong politics on fiscal discipline is not enough to counter the negative impact of being at/moving to fixed exchange rates. Our results are robust to a number of important sensitivity checks, including different estimators, alternative proxies for fiscal discipline, and sub-sample analysis.
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spelling Fiscal discipline and exchange rates : does politics matter?Fiscal disciplineDeficitPolitical EconomyExchange RatesWe look at the effect of exchange rate regimes on fiscal discipline, taking into account the effect of underlying political conditions. We present a model where strong politics (defined as policymakers facing longer political horizon and higher cohesion) are associated with better fiscal performance, but fixed exchange rates may revert this result and lead to less fiscal discipline. We confirm these hypotheses through regression analysis performed on a panel sample covering 79 countries from 1975 to 2012. Our empirical results also show that the positive effect of strong politics on fiscal discipline is not enough to counter the negative impact of being at/moving to fixed exchange rates. Our results are robust to a number of important sensitivity checks, including different estimators, alternative proxies for fiscal discipline, and sub-sample analysis.ISEG - REM - Research in Economics and MathematicsRepositório da Universidade de LisboaJalles, João TovarMulas-Granados, CarlosTavares, José2019-11-19T11:05:34Z2019-112019-11-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.5/18768engJalles, João Tovar, Carlos Mulas-Granados e José Tavares (2019). "Fiscal discipline and exchange rates : does politics matter?". Instituto Superior de Economia e Gestão – REM Working paper nº 0103 - 20192184-108Xinfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-03-06T14:48:19Zoai:www.repository.utl.pt:10400.5/18768Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T17:03:46.203593Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv Fiscal discipline and exchange rates : does politics matter?
title Fiscal discipline and exchange rates : does politics matter?
spellingShingle Fiscal discipline and exchange rates : does politics matter?
Jalles, João Tovar
Fiscal discipline
Deficit
Political Economy
Exchange Rates
title_short Fiscal discipline and exchange rates : does politics matter?
title_full Fiscal discipline and exchange rates : does politics matter?
title_fullStr Fiscal discipline and exchange rates : does politics matter?
title_full_unstemmed Fiscal discipline and exchange rates : does politics matter?
title_sort Fiscal discipline and exchange rates : does politics matter?
author Jalles, João Tovar
author_facet Jalles, João Tovar
Mulas-Granados, Carlos
Tavares, José
author_role author
author2 Mulas-Granados, Carlos
Tavares, José
author2_role author
author
dc.contributor.none.fl_str_mv Repositório da Universidade de Lisboa
dc.contributor.author.fl_str_mv Jalles, João Tovar
Mulas-Granados, Carlos
Tavares, José
dc.subject.por.fl_str_mv Fiscal discipline
Deficit
Political Economy
Exchange Rates
topic Fiscal discipline
Deficit
Political Economy
Exchange Rates
description We look at the effect of exchange rate regimes on fiscal discipline, taking into account the effect of underlying political conditions. We present a model where strong politics (defined as policymakers facing longer political horizon and higher cohesion) are associated with better fiscal performance, but fixed exchange rates may revert this result and lead to less fiscal discipline. We confirm these hypotheses through regression analysis performed on a panel sample covering 79 countries from 1975 to 2012. Our empirical results also show that the positive effect of strong politics on fiscal discipline is not enough to counter the negative impact of being at/moving to fixed exchange rates. Our results are robust to a number of important sensitivity checks, including different estimators, alternative proxies for fiscal discipline, and sub-sample analysis.
publishDate 2019
dc.date.none.fl_str_mv 2019-11-19T11:05:34Z
2019-11
2019-11-01T00:00:00Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv http://hdl.handle.net/10400.5/18768
url http://hdl.handle.net/10400.5/18768
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv Jalles, João Tovar, Carlos Mulas-Granados e José Tavares (2019). "Fiscal discipline and exchange rates : does politics matter?". Instituto Superior de Economia e Gestão – REM Working paper nº 0103 - 2019
2184-108X
dc.rights.driver.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
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dc.publisher.none.fl_str_mv ISEG - REM - Research in Economics and Mathematics
publisher.none.fl_str_mv ISEG - REM - Research in Economics and Mathematics
dc.source.none.fl_str_mv reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
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instacron_str RCAAP
institution RCAAP
reponame_str Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
collection Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
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