Budget Semi-Elasticity and its Impact on Debt Flexibility in the Context of the Debt Brake
Abstract The debate on the cyclical adjustment procedure of the debt brake has focused on problems with regards to potential output. The second key determinant of the cyclical budget component, however, has been neglected: the semi-elasticity of the budget balance, which measures the response of fed...
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| Format: | Article |
| Language: | deu |
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Sciendo
2022-11-01
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| Series: | Wirtschaftsdienst |
| Online Access: | https://doi.org/10.1007/s10273-022-3325-y |
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| author | Philipp Heimberger Bernhard Schütz |
| author_facet | Philipp Heimberger Bernhard Schütz |
| author_sort | Philipp Heimberger |
| collection | DOAJ |
| description | Abstract The debate on the cyclical adjustment procedure of the debt brake has focused on problems with regards to potential output. The second key determinant of the cyclical budget component, however, has been neglected: the semi-elasticity of the budget balance, which measures the response of federal revenues and expenditures to the business cycle. We analyse the sensitivity of estimates of the semi-elasticity with respect to data inputs and model specifications. Our results highlight estimation uncertainties that affect how much the federal government is allowed to borrow under the debt brake. |
| format | Article |
| id | doaj-art-432f83b35f3c4144a2e120a8404480f0 |
| institution | Kabale University |
| issn | 1613-978X |
| language | deu |
| publishDate | 2022-11-01 |
| publisher | Sciendo |
| record_format | Article |
| series | Wirtschaftsdienst |
| spelling | doaj-art-432f83b35f3c4144a2e120a8404480f02025-02-02T07:07:30ZdeuSciendoWirtschaftsdienst1613-978X2022-11-011021183483710.1007/s10273-022-3325-yBudget Semi-Elasticity and its Impact on Debt Flexibility in the Context of the Debt BrakePhilipp Heimberger0Bernhard Schütz1Wiener Institut für Internationale Wirtschaftsvergleiche (wiiw)Wiener Institut für Internationale Wirtschaftsvergleiche (wiiw)Abstract The debate on the cyclical adjustment procedure of the debt brake has focused on problems with regards to potential output. The second key determinant of the cyclical budget component, however, has been neglected: the semi-elasticity of the budget balance, which measures the response of federal revenues and expenditures to the business cycle. We analyse the sensitivity of estimates of the semi-elasticity with respect to data inputs and model specifications. Our results highlight estimation uncertainties that affect how much the federal government is allowed to borrow under the debt brake.https://doi.org/10.1007/s10273-022-3325-y |
| spellingShingle | Philipp Heimberger Bernhard Schütz Budget Semi-Elasticity and its Impact on Debt Flexibility in the Context of the Debt Brake Wirtschaftsdienst |
| title | Budget Semi-Elasticity and its Impact on Debt Flexibility in the Context of the Debt Brake |
| title_full | Budget Semi-Elasticity and its Impact on Debt Flexibility in the Context of the Debt Brake |
| title_fullStr | Budget Semi-Elasticity and its Impact on Debt Flexibility in the Context of the Debt Brake |
| title_full_unstemmed | Budget Semi-Elasticity and its Impact on Debt Flexibility in the Context of the Debt Brake |
| title_short | Budget Semi-Elasticity and its Impact on Debt Flexibility in the Context of the Debt Brake |
| title_sort | budget semi elasticity and its impact on debt flexibility in the context of the debt brake |
| url | https://doi.org/10.1007/s10273-022-3325-y |
| work_keys_str_mv | AT philippheimberger budgetsemielasticityanditsimpactondebtflexibilityinthecontextofthedebtbrake AT bernhardschutz budgetsemielasticityanditsimpactondebtflexibilityinthecontextofthedebtbrake |