Legislative budgetary power and fiscal discipline in the euro area

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Moira Catania ◽  
Mark J. Baimbridge ◽  
Ioannis Litsios
Keyword(s):  
Euro Area ◽  
Power Index ◽  
Democratic Legitimacy ◽  
Series Data ◽  
Budgetary Process ◽  
Fiscal Discipline ◽  
Content Type ◽  
Budget Institutions ◽  
Budgetary Power ◽  
The Impact

PurposeThe objective of this study is to understand the budgetary role of national legislatures in euro area (EA) countries and to analyse implications for fiscal discipline.Design/methodology/approachBuilding on the budget institutions literature, a legislative budgetary power index for all the 19 euro area (EA) countries is constructed using Organisation for Economic Co-operation and Development (OECD) and European Commission data as well as data generated from questionnaires to national authorities. A two-way fixed effects panel data model is then used to assess the effect of legislative budgetary power on the budget balance in the EA during 2006–2015.FindingsOverall, in the EA, formal legislative powers vis-à-vis the national budgetary process are weak, but there is more legislative involvement in Stability and Growth Pact (SGP) procedures, and legislative budgetary organisational capacity is generally quite good. In contrast to the traditional view in the budget institutions literature, this study’s empirical findings show that strong legislative budgetary power does not necessarily result in larger budget deficits.Research limitations/implicationsData on legislative budgeting were available from different sources, and time series data were very limited.Practical implicationsThere is scope to improve democratic legitimacy of the national budgetary process in the EA, without necessarily jeopardising fiscal discipline.Originality/valueThe constructed legislative budgetary power index covers all the 19 EA countries and has a broad scope covering various novel institutional characteristics. The empirical analysis contributes to the scarce literature on the impact of legislative budgeting on fiscal discipline.

Fiscal discipline will be key part of euro-area reform

2018 ◽  
Keyword(s):  
Euro Area ◽  
Risk Sharing ◽  
Deposit Insurance ◽  
Financial Risk ◽  
Insurance Scheme ◽  
Fiscal Discipline ◽  
German Government ◽  
Content Type ◽  
Institutional Architecture ◽  
The Impact

Subject Options for euro-area reform. Significance As negotiations advance towards the formation of a new German government, talks between Paris and Berlin about a reform of the euro-area’s governance and functioning are also under way. Whatever the new German executive looks like, it will face important choices about the future institutional architecture of the European single currency. Impacts A euro-area budget could buffer future shocks and dampen the impact of economic crises. The prospect of more financial risk-sharing through a deposit insurance scheme may trigger resistance in richer states such as Germany. Deepening the euro-area could intensify reluctance of Eastern member states not in the euro to join.

scholarly journals Macroeconomic determinants of interest rate spreads in Ghana

2017 ◽  
Vol 8 (1) ◽  
pp. 76-88 ◽  
Author(s):  
Samuel Kwabena Obeng ◽  
Daniel Sakyi
Keyword(s):  
Interest Rate ◽  
Exchange Rate Volatility ◽  
Institutional Quality ◽  
Fiscal Discipline ◽  
Content Type ◽  
Distributed Lag ◽  
Short Run ◽  
Interest Rate Spreads ◽  
Macroeconomic Determinants ◽  
The Impact

Purpose The purpose of this paper is to examine macroeconomic determinants of interest rate spreads in Ghana for the period 1980-2013. Design/methodology/approach The autoregressive distributed lag bounds test approach to cointegration and the error correction model were used for the estimation. Findings The results indicate that exchange rate volatility, fiscal deficit, economic growth, and public sector borrowing from commercial banks, increase interest rate spreads in Ghana in both the long and short run. Institutional quality reduces interest rate spreads in the long run while lending interest rate volatility and monetary policy rate reduce interest rate spreads in the short run. Research limitations/implications The depreciation of the Ghana cedi must be controlled since its volatility increases spreads. There is a need for fiscal discipline since fiscal deficits increase interest rate spreads. Government must reduce its domestic borrowing because the associated crowding-out effect increases interest rate spreads. The central bank must improve its monitoring and regulation of the financial sector in order to reduce spreads. Originality/value The main novelty of the paper (compared to other studies on Ghana) lies on the one hand; analysing macroeconomic determinants of interest rate spreads and, on the other hand, controlling for the impact of institutional quality on interest rate spreads in Ghana.

The impact of financial development, economic growth and energy consumption on environmental degradation

2015 ◽  
Vol 26 (5) ◽  
pp. 666-682 ◽  
Author(s):  
Madhu Sehrawat ◽  
A K Giri ◽  
Geetilaxmi Mohapatra
Keyword(s):  
Economic Growth ◽  
Energy Consumption ◽  
Financial Development ◽  
Environmental Degradation ◽  
Series Data ◽  
Development Economic ◽  
Content Type ◽  
Indian Economy ◽  
Long Run ◽  
The Impact

Purpose – The purpose of this paper is to investigate the impact of financial development, economic growth and energy consumption on environment degradation for Indian economy by using the time series data for the period 1971-2011. Design/methodology/approach – The stationary properties of the variables are checked by ADF, DF-GLS, PP and Ng-Perron unit root tests. The long-run relationship is examined by implementing the Autoregressive Distributed Lag bounds testing approach to co-integration and error correction method (ECM) is applied to examine the short-run dynamics. The direction of the causality is checked by VECM framework and variance decomposition is used to predict exogenous shocks of the variables. Findings – The empirical evidence confirms the existence of long-run relationship among the variables. Financial development appears to increase environmental degradation in India. The main contributors to environmental degradation are: economic growth, energy consumption financial development and urbanization. The results also lend support to the existence of environmental Kuznets curves for Indian economy. Research limitations/implications – The present study suggests that environmental degradation can be reduced at the cost of economic growth or energy efficient technologies should be encouraged to enhance the domestic product with the help of financial sector by improving environmental friendly technologies from advanced economies. Originality/value – This paper proposes to make a contribution to the existing literature through examining the relationship between financial development and environmental degradation in Indian economy during 1971-2011 by employing modern econometric techniques.

The double-edge resource-based view of logistics performance and governance in Asian countries

2018 ◽  
Vol 30 (3) ◽  
pp. 652-668 ◽  
Author(s):  
Bee Hui Koh ◽  
Wai Peng Wong ◽  
Chor Foon Tang ◽  
Ming K. Lim
Keyword(s):  
Ordinary Least Squares ◽  
Moderating Effect ◽  
Dark Side ◽  
Series Data ◽  
Asian Countries ◽  
Trade Facilitation ◽  
Content Type ◽  
Effect Model ◽  
The Impact ◽  
The Relationship

PurposeAsia has been transformed into a well-regulated dynamic platform for trade and is today world’s fastest-developing economic region. However, the increasing cross-border economic activities create new opportunities for corruption. The purpose of this paper is to assess the impact of corruption on trade facilitation using logistics performance index (LPI). This paper also examines the moderating effect of governance or government effectiveness (GE) on the relationship between corruption and LPI within Asian countries.Design/methodology/approachA panel of time-series data from year 2007 to 2014 of 26 Asian countries was collected for analysis. Static linear panel models which comprised of pooled ordinary least squares, fixed-effect model and random-effect model were utilised to analyse the panel data.FindingsThe findings show that corruption significantly affects LPI and each of the six dimensions in LPI. The results also show that governance or GE has a moderating effect on the relationship between corruption and LPI.Practical implicationsThis study benefits Asian governments to gain a better understanding on influences of corruption on trade facilitation and triggering suggestions of a government role in the relationship. Practically, the results could be used as a guideline in improving national LPI. Besides, the findings could be used to support policy decision to modify corruption regulations at the national and regional levels.Originality/valueThis study reveals that the optimistic view of sands in the wheel overcomes the dark side of the grease in the wheel practices. To be corrupt free or less corrupt is a rare and inimitable resource capability that makes nations logistically competitive.

The impact of Benin’s first public procurement code and its amendment on healthcare equipment acquisition prices

2018 ◽  
Vol 18 (4) ◽  
pp. 306-322 ◽  
Author(s):  
Pamphile Thierry Houngbo ◽  
Maikel Kishna ◽  
Marjolein Zweekhorst ◽  
Daton Medenou ◽  
Joske G.F. Bunder-Aelen
Keyword(s):  
Health Care ◽  
Time Series Data ◽  
Good Governance ◽  
Public Procurement ◽  
Linear Regression Analysis ◽  
Interrupted Time Series ◽  
Series Data ◽  
Content Type ◽  
The Impact ◽  
Health Care Equipment

PurposeTo satisfy donors and reduce public procurement acquisition prices, Benin has implemented and amended its first public procurement code guided by top-down principles of good governance.Design/methodology/approachThis study aims to measure the impact of the code and its amendment on public procurement acquisition prices of health-care equipment from 1995 to 2010.FindingsA segmented linear regression analysis was performed using interrupted time-series data. The analysis shows that the code and its amendment did not reduce acquisition prices, indicating the limited impact of the code. The authors recommend the implementation of bottom-up processes in establishing the public procurement system, and the development of a reference pricelist of the most widely used health-care equipment, as possible solutions for improving the effectiveness of the code.

Determinants of corporate effective tax rates: evidence from the euro area

2020 ◽  
Vol 33 (3/4) ◽  
pp. 427-444
Author(s):  
Antonio Barbera ◽  
Paloma Merello ◽  
Rafael Molina
Keyword(s):  
Euro Area ◽  
Listed Companies ◽  
Tax Rates ◽  
Effective Tax Rates ◽  
Content Type ◽  
Individual Analysis ◽  
The Individual ◽  
The Impact ◽  
Generalized Moments ◽  
Positive Effect

PurposeThe purpose of this paper is to investigate the effect of the determinants of corporate effective tax rates (ETR) of listed companies in euro area.Design/methodology/approachWith a large and recent panel of 2,870 listed companies for the period 2005–2016, the authors use the generalized moments method (GMM) to estimate global models for three groups of countries and specific models for six selected countries: Germany, Spain, France, Italy, Belgium and Greece.FindingsThe results confirm that ETR have different determinants depending on the countries analyzed. There is a significantly positive relationship with leverage and negative with size and financial profitability. However, economic profitability shows a statistically positive effect in the new members, but negative effect on old ones. In the individual analysis, Germany and Spain maintain this negative association with return on assets (ROA), but Belgium and Greece show a positive effect. The effect of the economic cycle shows statistically relevant, negatively in Germany but positively in Belgium and Greece.Originality/valueThis paper makes a novel contribution to the current debate on the need for harmonization of corporate income tax in the European Union (EU). For the first time, the group of countries whose common currency is the euro is considered with a great level of detail. In addition, the impact derived from the enlargement of the euro area and the individual analysis of the main countries is included. The European authorities must take into account the specific differences found in the ETR determinants because it hinders to take measures that limit tax competition.

Euro-area potential GDP will stay on low trajectory

2015 ◽  
Keyword(s):  
Euro Area ◽  
Productive Capacity ◽  
Potential Growth ◽  
Average Growth ◽  
Content Type ◽  
Us Economy ◽  
Long Run ◽  
Permanent Loss ◽  
Potential Gdp ◽  
The Impact

Subject Declining potential growth trends. Significance Although the euro-area is enjoying stronger growth this year, the rebound has been modest. Real GDP growth should average 1.5-1.7% in 2015, disappointing hopes for growth closer to 2.0%. This is adding to concern about the impact of persistent investment weakness, which curbs potential growth. Over 2010-14, the US economy grew by 2.2% on average, the same as during the five years preceding the financial crisis (2004-08), although both periods are mediocre compared to the long-run average of 3.0% for the 15 years prior to 2009. The euro-area's double-dip recession depressed its 2010-14 average growth to 0.7% compared with a rate of 2.2% for both 2004-08 and the 15 years prior to 2009. Impacts Chronic lack of job opportunities can lead to a permanent loss in productive capacity, damaging consumer confidence and spending. Policymakers will need to promote investment and job creation, lowering the cost of capital and reforming labour markets. These reforms could stir political instability by fuelling social resentment and political populism.

French-Italian tensions will affect EU policy

2018 ◽  
Keyword(s):  
Euro Area ◽  
National Politics ◽  
Content Type ◽  
Business Ownership ◽  
Eu Policy ◽  
The Impact

Subject The impact of French-Italian tensions. Significance Shared interests are being driven apart by conflicting national politics which will threaten Europe's future consolidation. Impacts The growth of trans-border business ownership will face increasing challenges on both sides of the border. Macron’s proposals for a stronger euro-area will not to be supported in Rome. Growing lack of cooperation on migration will deepen bilateral discord.

Euro-area GDP growth will slow in 2019

2019 ◽  
Keyword(s):  
Monetary Policy ◽  
Euro Area ◽  
Balance Sheet ◽  
Lower Growth ◽  
Content Type ◽  
Large Size ◽  
Area Growth ◽  
Risks Assessment ◽  
European Parliament Elections ◽  
The Impact

Subject Reasons behind the euro-area growth slowdown. Significance In its Winter 2019 interim forecasts, the European Commission downgraded its expectations for euro-area growth to 1.3% and 1.6% for 2019 and 2020, respectively, from 1.9% and 1.7% three months earlier. At its January meeting, the ECB Governing Council foreshadowed lower growth, shifting its risks assessment, saying that downside risks will dominate. Impacts The European Parliament elections could have a destabilising impact on growth in some countries. Monetary policy can do nothing to cushion the impact of lower growth caused by trade conflict. In case of recession, monetary policy stimulus will be constrained by the large size of the ECB balance sheet.

Carbon emissions and industrial growth: an ARDL analysis for Pakistan

2016 ◽  
Vol 10 (4) ◽  
pp. 642-658 ◽  
Author(s):  
Muhammad Irfan Javaid Attari ◽  
Matloub Hussain ◽  
Attiya Y. Javid
Keyword(s):  
Economic Growth ◽  
Carbon Dioxide ◽  
Climatic Change ◽  
Industrial Sector ◽  
Series Data ◽  
Clear Understanding ◽  
Industrial Growth ◽  
Content Type ◽  
The Impact

Purpose This paper is a direct extension of the work by Hussain et al. (2012). They have investigated a long-term relationship between climatic change and economic growth in case of Pakistan. Agricultural sector plays an important role in economic field, whereas industrial sector is the main source of carbon dioxide (CO2) emission. Therefore, this study aims to replace economic growth variable with industrial growth in case of Pakistan. Design/methodology/approach Investigation is made on the basis of the environmental Kuznets curve by using the time series data during the period 1971-2009. The per capital carbon dioxide (CO2) emission is used as an environmental indicator and per capita industrial income as the economic indicator. Different econometric tools including augmented Dickey–Fuller, autoregressive distributed lag and Granger-causality test are used to verify this relationship. Findings The empirical findings will help the policy-makers of Pakistan in developing new standards and monitoring networks for reducing CO2 emission. It is essential to extend the current research work at provincial and different sectors levels in order to have clear understanding about the impact of current emission rate. Originality/value This study replaces economic growth variable with industrial growth in case of Pakistan because the industrial sector is the main source of carbon dioxide (CO2) emission. This study is to investigate a long-term relationship between climatic change and industrial growth in case of Pakistan.

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