1.

Record Nr.

UNINA9910959814203321

Autore

Celasun Oya

Titolo

On the Properties of Various Estimators for Fiscal Reaction Functions / / Oya Celasun, Joong Kang

Pubbl/distr/stampa

Washington, D.C. : , : International Monetary Fund, , 2006

ISBN

9786613820983

9781462311460

1462311466

9781452723907

1452723907

9781282447783

1282447785

9781451989007

1451989008

Edizione

[1st ed.]

Descrizione fisica

1 online resource (29 p.)

Collana

IMF Working Papers

Altri autori (Persone)

KangJoong

Soggetti

Fiscal policy - Econometric models

Finance, Public

Bonds

Debt Management

Debt

Debts, Public

Econometric models

Econometrics & economic statistics

Econometrics

Economic theory

Estimation techniques

Estimation

Fiscal Policy

Fiscal policy

Fiscal stance

General Financial Markets: General (includes Measurement and Data)

Investment & securities

Investments: Bonds

Macroeconomics

Macroeconomics: Production

National Deficit Surplus

Output gap



Panel Data Models

Production and Operations Management

Production

Public debt

Public finance & taxation

Public Finance

Sovereign Debt

Spatio-temporal Models

Lingua di pubblicazione

Inglese

Formato

Materiale a stampa

Livello bibliografico

Monografia

Note generali

"July 2006."

Nota di bibliografia

Includes bibliographical references.

Nota di contenuto

""Contents""; ""I. INTRODUCTION""; ""II. BIASES OF ORDINARY-LEAST-SQUARES (OLS) AND LEAST-SQUARES-WITH-DUMMY VARIABLES ( LSDV) ESTIMATORS: ANALYTICAL SOLUTIONS""; ""III. MONTE CARLO EXPERIMENTS""; ""IV. CONCLUSION""; ""References""

Sommario/riassunto

This paper evaluates the bias of the least-squares-with-dummy-variables (LSDV) method in fiscal reaction function estimations. A growing number of studies estimate fiscal policy reaction functions-that is, relationships between the primary fiscal balance and its determinants, including public debt and the output gap. A previously unexplored methodological issue in these estimations is that lagged debt is not a strictly exogenous variable, which biases the LSDV estimator in short panels. We derive the bias analytically to understand its determinants and run Monte Carlo simulations to assess its likely size in empirical work. We find the bias to be smaller than the bias of the LSDV estimator in a comparable autoregressive dynamic panel model and show the LSDV method to outperform a number of alternatives in estimating fiscal reaction functions.