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CNB > Economic research > Research publications > Research and Policy Notes > 2012 > Fiscal Discretion in the Czech Republic in 2001–2011: Has It Been Stabilizing?

Fiscal Discretion in the Czech Republic in 2001–2011: Has It Been Stabilizing?

Róbert Ambriško, Vítězslav Augusta, Dana Hájková, Petr Král, Pavla Netušilová, Milan Říkovský, Pavel Soukup

We survey discretionary measures of Czech fiscal policy in the period 2001–2011 and analyze their episodes and macroeconomic impacts. We use bottom-up and top-down methods to identify fiscal discretion and we compare the results with Kalman filtering. Fiscal discretion is found to be used frequently and to be large in several years. At the same time, the results signal that macroeconomic stabilisation has not been major aim of fiscal discretion measures. For example, in the years of economic recession 2010–2011, the government put emphasis on pro-cyclical consolidation.

JEL codes: H50, H62

Keywords: Deficit, economic cycle, fiscal discretion, government expenditures, government revenues

Issued: September 2012

Download: RPN No. 1/2012 (pdf, 357 kB)