Amélie Barbier-Gauchard, Thierry Betti, Théo Metz, European Journal of Political Economy, 2023, 102457, ISSN 0176-2680, https://doi.org/10.1016/j.ejpoleco.2023.102457, HCERS rank A, CNRS rank 2.
Abstract: We develop a behavioural macroeconomic model to investigate the question of fiscal policy credibility and how agents’ expectations about the output gap, public debt, expenditure and taxation affect the fiscal multiplier and debt stability. To do this, we model heterogeneous expectation-formation processes in a market populated by fundamentalists and chartists, agents being able to switch from one rule to another depending on the effective outcome in each period. This model produces waves of optimism and pessimism along the business cycle. We show in this article that when agents are optimistic about the future output gap and public debt, the fiscal multiplier tends to be larger whatever the nature of the fiscal shock. It also appears that fiscal expansion has less of a negative effect on public debt. Furthermore, agents’ expectations about public debt and the fiscal credibility of the government affect indicators of government performance (the fiscal multiplier and public debt stability).
Presentation: 8th European Workshop on Political Macroeconomics (Sofia, June 2024), 6th Doctoral workshop on Quantitative Dynamic Economics (Strasbourg, October 2023), Workshop on Scarring, hysteresis, and investment in Europe College of Europe (Bruges, November 2022), 1st International Workshop on Economic Growth and Macroeconomic Dynamics (Online/Rome, September 2022), Tinbergen Institute Summer School on Behavioural Macro and Complexity (Online, August 2022), 10th UECE Conference on Economic and Financial Adjustment (Lisbon, July 2022), 19th Augustin Cournot Doctoral Days (poster session Strasbourg, May 2022), ERMEES seminar (Strasbourg, April 2022)
New Fiscal Transparency Index and Public Debt Borrowing Costs, Théo Metz, BETA Working Paper, 2024-50, 2024
Available here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5027741
Abstract: This study examines the determinants of public debt borrowing costs, focusing particularly on the impact of scal transparency on sovereign bond rates. To assess this relationship, we construct a new Fiscal Transparency Index (FTI) inspired by the concepts of monetary transparency, incorporating the roles of all budgetary entities including independent scal institutions (IFIs), the government, the legislature, and the supreme audit institutions (SAI). This index encompasses dimensions of political, economic, procedural, policy, and operational transparency. Our analysis spans 27 developed and developing countries from 2006 to 2023. Findings indicate enhanced fiscal transparency correlates with reduced sovereign bond rates, especially regarding developing economies' long-term interest rates. Results are also robust to several controls, alternative measures, and modelisations.
Presentation: 12th UECE Conference on Economic and Financial Adjusment (Lisbon, July 2024), 40th GdRE (Orléans, July 2024), 23rd LAGV (Marseille, June 2024), 6th International Conference on European Economics and Politics (Zürich, June 2024), 72th AFSE (Bordeaux, June 2024), Journée des doctorants du BETA (Nancy, May 2024), 10e Journée Doctorale d’Analyse des Politiques Publiques (Le Havre, March 2024), ERMEES seminar Strasbourg (December, 2023)
Théo Metz, Bulletin de l’Observatoire des politiques économiques en Europe, Observatoire des Politiques Economiques en Europe (OPEE), 2022, vol. 46(1), pages 77-88, September
Abstract: Le 5 septembre 2022, le FMI a proposé une nouvelle réforme du cadre budgétaire de l’Union européenne en accordant plus de pouvoir aux institutions et aux règles budgétaires. Dans celle-ci, les institutions budgétaires indépendantes nationales ont un rôle accru dans le contrôle et l’évaluation des plans budgétaires nationaux menés par les gouver- nements. Cette note revient dans un premier temps sur la création de ces institutions budgétaires indépendantes au sein de l’Union européenne, et porte ensuite un regard sur le potentiel rôle que ces institutions peuvent jouer dans le futur en s’appuyant sur une comparaison avec les banques centrales indépendantes.
Fiscal multipliers, public debt anchor and government credibility in a behavioural macroeconomic model, Amélie Barbier-Gauchard, Thierry Betti, Théo Metz, INFER Brief Series N°2, 2024, [link]
Fiscal deviations and the role of independent fiscal institutions, Ongoing work co-authored with Carolina Ulloa-Suarez and Oscar Valencia [New draft avalaible soon]
Cibles et prévisions budgétaires : Le rôle du Haut Conseil des Finances Publiques en France, [Ongoing work, New draft avalaible soon]