This paper tests the cyclicality of fiscal policy in Israel. We find that government deficits are mildly counter-cyclical, mainly in recessions. Expenditures, and in particular, public investment, are pro-cyclical. However, we find that both the government deficit and expenditures have become more countercyclical after 1985, a period that is characterized by improved fiscal discipline, following the Israeli Stabilization. We interpret this result as an indication that Israel is nowadays in a transition from pro-cyclical fiscal policy, as in many developing countries, to countercyclical fiscal policy, as is more common in developed countries.

Cyclicality of Fiscal policy in Israel / M., Strawczynski; Zeira, Joseph. - In: ISRAEL ECONOMIC REVIEW. - 5:1(2007), pp. 47-66.

Cyclicality of Fiscal policy in Israel

ZEIRA, JOSEPH
2007

Abstract

This paper tests the cyclicality of fiscal policy in Israel. We find that government deficits are mildly counter-cyclical, mainly in recessions. Expenditures, and in particular, public investment, are pro-cyclical. However, we find that both the government deficit and expenditures have become more countercyclical after 1985, a period that is characterized by improved fiscal discipline, following the Israeli Stabilization. We interpret this result as an indication that Israel is nowadays in a transition from pro-cyclical fiscal policy, as in many developing countries, to countercyclical fiscal policy, as is more common in developed countries.
2007
Business Cycles, Fiscal Policy, Israel.
Cyclicality of Fiscal policy in Israel / M., Strawczynski; Zeira, Joseph. - In: ISRAEL ECONOMIC REVIEW. - 5:1(2007), pp. 47-66.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11385/5653
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