Do Fiscal Rules Constrain Fiscal Policy? A Meta-Regression-Analysis

44 Pages Posted: 12 Apr 2016

See all articles by Friedrich Heinemann

Friedrich Heinemann

ZEW – Leibniz Centre for European Economic Research; University of Heidelberg - Alfred Weber Institute for Economics

Marc-Daniel Moessinger

Centre for European Economic Research (ZEW)

Mustafa Yeter

ZEW – Leibniz Centre for European Economic Research

Date Written: March 21, 2016

Abstract

We implement a meta-regression-analysis for the budgetary impact of numerical fiscal rules. Based on 30 studies published in the last decade, we offer a consensus estimate with respect to the level of statistical significance, provide suggestive evidence for the effect size, and identify study features of relevance for the measured impact of fiscal rules. Overall, the results document a constraining impact of rules. However, this impact is weakened if refined identification strategies are employed. Moreover, the results provide evidence for a publication bias in which journals are more likely to report constraining and statistically significant effects compared to working papers. We further provide recommendations for future research on the budgetary impact of fiscal rules.

Keywords: fiscal rules, meta-regression-analysis, public finances

JEL Classification: H50; H6; H63

Suggested Citation

Heinemann, Friedrich and Moessinger, Marc-Daniel and Yeter, Mustafa, Do Fiscal Rules Constrain Fiscal Policy? A Meta-Regression-Analysis (March 21, 2016). ZEW - Centre for European Economic Research Discussion Paper No. 16-027, Available at SSRN: https://ssrn.com/abstract=2762314 or http://dx.doi.org/10.2139/ssrn.2762314

Friedrich Heinemann (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

HOME PAGE: http://www.zew.de

University of Heidelberg - Alfred Weber Institute for Economics ( email )

Grabengasse 14
Heidelberg, D-69117
Germany

Marc-Daniel Moessinger

Centre for European Economic Research (ZEW) ( email )

L7,1
Mannheim, DE 68161
Germany
+49 621 1235 161 (Phone)
+49 621 1235 223 (Fax)

HOME PAGE: http://www.zew.de/en/mitarbeiter/mitarbeiter.php3?action=mita&kurz=mdm

Mustafa Yeter

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

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