This paper offers new empirical insights into the relationship between the European fiscal framework and the cyclical stance of fiscal policy in EMU countries. By employing a Time-Varying Coefficient (TVC) model, we generate country- and year-specific measures of fiscal cyclicality from 1995 to 2019. We then quantify the evolving intensity of fiscal rules through a country- and year-specific composite index and examine its relationship with fiscal cyclicality via panel regressions with multiple estimators, including a robust IV-GMM specification that addresses endogeneity concerns. This dual-framework strategy enables us to capture the distortion introduced by real-time revisions and identify a significant procyclical bias in peripheral countries, which is largely masked when ex post data are used. In other words, our findings reveal a marked asymmetry: while the estimated relationship between fiscal rules and cyclicality is neutral or mildly countercyclical in core countries, it is significantly procyclical in peripheral ones when real-time data are considered. These results have important implications for the revised European fiscal framework, as the new indicator (i.e., net expenditure) continues to rely on cycle-sensitive variables and may therefore perpetuate the same structural basis. Our analysis calls for a deeper reconsideration of the methodology used to estimate potential output in the EU. By demonstrating how the interaction between fiscal rules and real-time macroeconomic estimates can generate unintended policy outcomes, this study contributes to a more informed debate on the future of fiscal governance in the euro area.
This paper examines the structural ties between federally recognized programmatic accreditors and their affiliated professional and trade associations, arguing that these organizational arrangements constitute conflicts of interest that compromise the quality-assurance function accreditation is intended to serve. Drawing on a novel dataset constructed from IRS Form 990 XML filings for 25 accreditor-association pairs over a seven-year panel (2017–2023), we develop and operationalize a three-part typology of capture mechanisms: structural subordination, financial entanglement, and governance overlap. We construct a Regulatory Capture Index (RCI) to measure the intensity of structural capture across the sample. Twenty-two of the 25 pairs are joined by a shared employer identification number, a consolidated filing, or a single legal identity, leaving three structurally separate accreditors; all fourteen licensure-gated health professions pairs score at the maximum RCI of 1.0. Scores are bimodal and static, with no pair occupying an intermediate position and none altering its organizational form across the panel. Because shared legal identity leaves no arm’s-length financial or governance record, separation is observationally indistinguishable from complete entanglement for 88 percent of the sample, suggesting that the arrangements that most compromise independence are precisely those that generate the least evidence of it.
What are the long-run economic consequences of short-lived but intense institutional shocks? We study the post–World War II occupation of Austria, where the country was divided into Soviet and Western Allied zones for ten years before reunification. Using a spatial regression discontinuity design combined with a difference-in-differences approach, we show that areas initially occupied by Soviet forces remain significantly less economically developed today. These regions are less populated, host fewer and lower-paying jobs, and exhibit substantially higher rates of out-commuting than comparable areas in the former Western zones. We show that these persistent differences are driven by a large population flight triggered by the onset of the Soviet occupation, which durably shifted the spatial distribution of economic activity. This initial migration shock altered local agglomeration forces, leading to sustained regional divergence despite the restoration of a unified institutional framework. Our findings highlight how even temporary institutional shocks can have long-lasting economic effects.
We investigate links between routine-biased technical change, the structure of occupational employment, and cross-country income differences. To implement this, we combine several data sources, including national labour force surveys and the Penn World Tables. In our novel dataset spanning 92 countries, we document a negative relationship between the employment share of routine occupations and GDP per hour worked. We then conduct a development accounting exercise in which we differentiate labour inputs by occupation and allow for occupation-specific technologies. We find a systematic relationship between occupation-specific productivities and development. Labour in routine occupations tends to be much more productive in richer countries, with effective productivity in the top 25 percent being about 14 times higher than in the bottom 25 percent of countries ranked by GDP per hour worked. Cross-country gaps in routine technology alone account for about 17 percent of the 90–10 ratio of GDP per hour worked, whereas differences in abstract labour technology do not contribute to the observed GDP dispersion. Eliminating all occupations’ and capital’s technology differences would compress the GDP distribution by 32 to 40 percent.
