The Economic Effects of the EU Budget: A VAR Analysis*

Asdrubali, Pierfederico; Kim, Soyoung

doi:10.1111/j.1468-5965.2008.00825.x

Cited by 10 publications

(6 citation statements)

References 19 publications

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“…13 These authors estimate that $1 billion program of "typical" Latin American country infrastructure projects of tertiary roads and road maintenance which give rise to the generation of around 300,000-500,000 jobs. 14 On the stabilization role of the Structural Funds see Asdrubali and Kim (2008). It should be mentioned that the countries members of the East African Community have proposed imposing a tax on their custom revenues to finance the administrative expenses of their regional organizations (Braude, 2008).…”

Section: Discussionmentioning

confidence: 99%

Economic Integration and Unemployment in Mercosur

Cáceres¹

2011

JEI

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This paper quantifies the interdependence in labor markets that exists in the Mercosur countries. Two sets of panel data are constructed: one formed by the aggregation of annual time series data from Argentina and Brazil, and another with data from Uruguay and Paraguay. These two sets of data are used to estimate a Var model that includes the following variables: economic growth, real effective exchange rates, and unemployment rates. Another Var is estimated including the change in the wage levels in place of the unemployment rates. The results indicate that strong cross border effects ensue between countries such that national unemployment rates drop in response to shocks of economic growth and devaluation in other member countries. The paper ends with a series of recommendations on the design of regional stabilization policies.• JEL Classification:F15, F42

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Section: Discussionmentioning

confidence: 99%

Economic Integration and Unemployment in Mercosur

Cáceres¹

2011

JEI

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“…We followed the regression models of Balli and Rana (2015) and Balli et al (2019) to quantify the degree of inter-regional risk-sharing via EU Funds inflows. Asdrubali and Kim (2008) applied a similar approach in a vector autoregressive (VAR) multi-equational setting on national-level data by decomposing the fraction of income smoothing via EU budget revenues (inflows), EU budget expenditure (outflows) and EU net transfers. 10 The regression model examined whether the regional income plus EU Funds inflows fluctuate less than one-to-one with changes in output.…”

Section: Theoretical Framework and Empirical Strategymentioning

confidence: 99%

“…By following state-of-the-art modelling of income risk-sharing (Arachi et al, 2010;Asdrubali and Kim, 2008;Balli and Rana, 2015;Bayoumi and Masson, 1995;Decressin, 2002;Petraglia et al, 2018), our empirical analysis suggests that the Cohesion Policy contributed to offset idiosyncratic shocks to regional incomes across the EU over the 2000-2013 period, thus helping to stabilize the economy of the EU regions. In particular, over the 14 years considered and for the entire sample of 270 NUTS-2 regions, the Cohesion Policy smoothed an average of approximately 0.33% of the income shocks.…”

Section: Introductionmentioning

confidence: 99%

“…In this framework, ‘[a] useful way of thinking about the role of the EU budget in implementing common policies is the standard classification in public finance and fiscal federalism of the allocation, the redistribution and the stabilization functions of a central state’ (Asdrubali and Kim, 2008, p. 935). The Cohesion Policy is one of the key policies of the EU that absorbs approximately one third of the total budget to ensure that all EU regions benefit from the integration process.…”

Section: Introductionmentioning

confidence: 99%

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EU Cohesion Policy and Inter‐regional Risk‐sharing: First Evidence and Lessons Learned

Giua

Pericoli

Pierucci

2023

J of Common Market Studies

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We provide the first evidence of the role played by the Cohesion Policy in terms of insurance against income shocks affecting the European Union (EU) regions. By following state‐of‐the‐art modelling, we measured income risk‐sharing amongst 270 NUTS‐2 regions over two concluded programming periods (2000–2006 and 2007–2013), distinguishing across several sub‐groups of regions characterized by different macroeconomic conditions, integration of markets and regional levels of economic disadvantage. We found that, by and large, the income risk‐sharing role of the EU Funds inflow is non‐negligible and it becomes particularly relevant in the second programming period. Further, the Cohesion Policy exerted a significant and positive role in income stabilization after the Global Financial Crisis and the Sovereign Debt Crisis and during the negative phases of the business cycle, particularly for those regions lagging or belonging to less stable countries from the macroeconomic point of view (Less Developed regions and Mediterranean EU). This novel evidence of the short‐run stabilizing effect of the Cohesion Policy aims to contribute to the debate on the role of EU institutions in improving the capacity of regions to tackle economic shocks, which is particularly relevant at the launch of the Next Generation EU.

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“…Asdrubali and Kim 2008;Asdrubali, Sørensen, and Yosha 1996;von Hagen and Hepp 2001;Hepp and von Hagen 2011;Mélitz and Zumer 2002). One method for resolving this inequality is to employ the instrument of intergovernmental fiscal transfers.…”

Section: Introductionmentioning

confidence: 99%

Revisiting the redistribution effects of intergovernmental fiscal transfers: evidence from Taiwan

Huang¹,

Yan

2014

Journal of Economic Policy Reform

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This paper employs a panel of 23 local governments in Taiwan over 1998-2010 to re-estimate the redistribution effects of intergovernmental fiscal transfers by considering a self-financing resources of local government as the transition variable in panel smooth transition regression models. Empirical results show that the income (or tax revenues) redistribution effects of fiscal transfer policies are nonlinear and vary with time and across local governments. The grants from central government can improve income and tax revenues distribution of local governments; however, the centrally allotted tax revenues have inverse effects and the total fiscal transfers have ambiguous effects. The total fiscal transfer is a proper policy instrument for improving income redistribution, and the grants for improving tax revenues redistribution. However, high self-financing resources ratios are harmful for these redistribution effects.

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The Economic Effects of the EU Budget: A VAR Analysis*

Cited by 10 publications

References 19 publications

Economic Integration and Unemployment in Mercosur

Economic Integration and Unemployment in Mercosur

EU Cohesion Policy and Inter‐regional Risk‐sharing: First Evidence and Lessons Learned

Revisiting the redistribution effects of intergovernmental fiscal transfers: evidence from Taiwan

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