The name is absent

5. The Dynamic Behaviour of Budget Components and Output -

the Cases of France, Germany, Portugal, and Spain 119

Antonio Afonso and Peter Claeys

5.1 Introduction 119

5.2 The Recent Fiscal Imbalances in the EU 120

5.3 A SVAR Model for Gauging Fiscal Indicators 126

5.4 Empirical Analysis 134

5.5 Conclusion 153

Appendix 5.A Data Sources 155

Appendix 5.B The Fiscal Indicator: Some Additional Results 156

Appendix 5.C Recursive Estimates of Budget Elasticities 157

Discussion, Jan in 't Veld 159

Part III Reliability of Fiscal Indicators 161

6. The Reliability of EMU Fiscal Indicators: Risks and Safeguards 163

Fabrizio Balassone, Daniele Franco and Stefania Zotteri

6.1 Introduction 163

6.2 The Reconciliation Account (SFA) 165

6.3 Deficit Revisions in Italy, Portugal, and Greece 168

6.4 Fiscal Rules and Fiscal Gimmickry: a Simple Model 172

6.5 Conclusions 177

Discussion, Joao NogueiraMartins 182

7. Uncertainty Bounds for Cyclically Adjusted Budget Balances 185

Roy Barrell, Ian Hurst and James Mitchell

7.1 Introduction 185

7.2 Estimating the Output Gap and Its Uncertainty 186

7.3 Cyclically Adjusting the Budget Deficit 192

7.4 Uncertainty in the Adjustment 198

7.5 Implications and Conclusions 204

Discussion, Gyorgy Kopits 205

Bibliography 208

Index 219