Table 9: Budget balances, labour market reforms (reform dummies defined as policies reducing the
restrictiveness of EPL or the generosity of unemployment subsidies. EU-14 except EL, 1986-2001)
|
Dependent variable: |
(1) |
(2) |
|
Constant |
-2.6*** |
-2.48*** |
|
(-5.11) |
(-4.83) | |
|
Lagged dependent |
0.73*** |
0.76*** |
|
variable |
(18.76) |
(23.71) |
|
Output gap |
-0.014 |
0.034 |
|
(-0.32) |
(0.08) | |
|
Lagged debt/GDP ratio |
0.049*** |
0.046*** |
|
(6.24) |
(5.64) | |
|
Dummy for labour |
-0.27 | |
|
market reforms based on |
(-1.36) |
0.036 |
|
market reforms based on |
(0.19) | |
|
N. obs. |
238 |
238 |
|
R sq. |
0.70 |
0.70 |
|
Chi sq |
1174 |
1164 |
Notes: Estimations method: fixed effects, instrumental variables
regression. The output gap is instrumented with its own lag and the US
lagged output gap. All fiscal variables are expressed as shares on
potential output.
Z statistics are reported in parentheses. *, **, and *** denote,
respectively, significance at the 10, 5 and 1 per cent level.
Coefficients for country fixed effects are not reported.
Source: Authors’ calculation on FRDB data and DG ECFIN AMECO
database.
127
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