부산대학교 도서관

Results from panel regressions on a new dataset of government revenue windfalls and shortfalls in EU Member States demonstrate that macroeconomic developments have a significant impact on cyclically adjusted fiscal outcomes and indicators. In particular, the results show that an increase in household debt results in higher government revenue windfalls, while a higher trade balance leads to government revenue shortfalls. These revenue windfalls and shortfalls have distorted the signals from fiscal indicators that are used to measure the ‘underlying’ fiscal position and the governments’ fiscal efforts to improve debt sustainability. The paper also finds that temporary windfall revenues trigger permanent increases in government spending or decreases in tax rates. Taking account macro-economic indicators, such as the trade balance and private debt, provides relevant complementary information for medium-term budgetary planning, budgetary rules and surveillance.