Fiscal Policy and Regional Output Volatility: Evidence from Russia. Issue 11 (1st November 2016)

• Record Type: Journal Article
• Authors: Eller, Markus; Fidrmuc, Jarko; Fungáčová, Zuzana
• Is Part Of: Regional studies. Volume 50:Issue 11(2016)
• Page Start: 1849
• Page End: 1862
• Publication Date: 2016-11-01
• Subjects: Output volatility -- Automatic stabilizers -- Discretionary fiscal policy -- System-generalized method of moments (GMM) -- Russia; 产出波动 -- 自动稳定器 -- 相机抉择的财政政策 -- 系统广义矩估计方法（GMM） -- 俄罗斯; Volatilité de la production -- Stabilisateurs automatiques -- Politique fiscale discrétionnaire -- Méthode des moments généralisés (GMM) en système -- Russie; Outputvolatilität -- Automatische Stabilisatoren -- Diskretionäre Fiskalpolitik -- System-GMM-Schätzer -- Russland; Volatilidad de la producción -- Estabilizadores automáticos -- Política fiscal discrecional -- Método generalizado de momentos -- Rusia; E32 -- E62 -- R11; Regional planning -- Periodicals; Regional planning -- Great Britain -- Periodicals; 307.14
• DOI: 10.1080/00343404.2015.1064884
• Languages: English
• ISSNs: 0034-3404

Abstract

Abstract : Eller M., Fidrmuc J. and Fungácˇ ová Z. Fiscal policy and regional output volatility: evidence from Russia, Regional Studies. This paper investigates the relationship between fiscal policy and output volatility in Russian regions between 2000 and 2009. Accounting for endogeneity between output volatility and fiscal developments by using system-generalized method of moments (GMM) estimation techniques, the results indicate that discretionary fiscal policy contributes to output volatility and induces macroeconomic instability at the regional level in Russia. This corroborates previous studies using cross-country data. To reduce business cycle fluctuations, it would be necessary to curtail procyclical fiscal activism at the regional level, e.g. via fiscal rules and sound institutions of fiscal federalism.