<abstract xmlns="http://www.w3.org/1999/xhtml"><p>The aim of the article is to investigate the fiscal determinants of stock-flow adjustment (SFA). Previous literature suggests that SFA may be used strategically to reduce budget deficit and public debt. As such, SFA impairs fiscal transparency and may endanger fiscal sustainability. Therefore, special attention should be paid by economists and policymakers. The study pertains to the European Union countries in the years 2005-2016. The empirical analysis supports the hypothesis that SFA is inversely related to public debt, whereas the inverse relationship between budget balance and SFA is not confirmed. The article contains additional analyses for selected components of SFA as well as narrower time and space coverage.</p></abstract>

The aim of the article is to investigate the fiscal determinants of stock-flow adjustment (SFA). Previous literature suggests that SFA may be used strategically to reduce budget deficit and public debt. As such, SFA impairs fiscal transparency and may endanger fiscal sustainability. Therefore, special attention should be paid by economists and policymakers. The study pertains to the European Union countries in the years 2005-2016. The empirical analysis supports the hypothesis that SFA is inversely related to public debt, whereas the inverse relationship between budget balance and SFA is not confirmed. The article contains additional analyses for selected components of SFA as well as narrower time and space coverage.

Stock-Flow Adjustment – Only a Residual Value? Evidence from European Union Countries

Poznań University of Economics and Business

Financial Internet Quarterly

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

The aim of the article is to investigate the fiscal determinants of stock-flow adjustment (SFA). Previous literature suggests that SFA may be used...

Stock-Flow Adjustment – Only a Residual Value? Evidence from European Union Countries

Published Online: Oct 04, 2019

Page range: 10 - 20

Received: Jun 05, 2018

Accepted: Jul 30, 2019

DOI: https://doi.org/10.2478/fiqf-2019-0016

Keywords
public debt, budget deficit, panel data analysis

© 2019 Monika Banaszewska, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Stock-Flow Adjustment – Only a Residual Value? Evidence from European Union Countries

Published Online: Oct 04, 2019

Page range: 10 - 20

Received: Jun 05, 2018

Accepted: Jul 30, 2019

DOI: https://doi.org/10.2478/fiqf-2019-0016

Keywordspublic debt, budget deficit, panel data analysis

© 2019 Monika Banaszewska, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Keywords
public debt, budget deficit, panel data analysis