The name is absent

Figure 2.1 (continued)

Japan

Table 2.3 presents summary statistics related to the estimation of model (2.10) by
ordinary least squares (OLS). A positive and statistically significant (at 5% at least)
response is observed in Belgium, Spain, Italy, Netherlands, Portugal, Denmark, Sweden,
UK and the US. In the rest of the countries, except in Japan, the reaction of the primary
balance to debt stocks is either significant at 10% (Ireland and Austria) or non-significant,
although the estimate is positive. Only in Japan, the estimate is negative but non-
significant. When significant, the reaction of the primary surplus to the output gap is
positive, thus pointing to counter-cyclical fiscal policies. This seems to be the case in
most EU Member States not in the euro area, as well as Finland, Austria and, to a much
lesser extent, Portugal. In Belgium, Germany, Greece and Ireland the correlation between
the primary balance and the output gap is negative albeit non-significant. Finally, in all
the countries, except in Portugal, the inertia is statistically significant, positive indeed and
in some cases relatively strong. In countries like Ireland, Japan and, to a lesser extent,
Belgium, UK and US it appears pretty close to 1.

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