Outcome variable: Cyclical component of total government spending (CGE)

(1)

(2)

(3)

(4)

GMM-Diff

GMM-Sys

GMM-Diff

GMM-Sys

VARIABLES

Economic cycle ( $y_{it}$ )

2.551***

1.401**

2.551**

1.401*

(0.666)

(0.599)

(0.722)

(0.673)

Discretionary fiscal policy ( $CG{E}_{it-1}$ )

0.485**

0.790***

0.485

0.790***

(0.211)

(0.243)

(0.269)

(0.154)

Sustainability constraint on government debt ( $d_{it-1}$ )

−0.002**

−0.001**

−0.002

−0.001

(0.001)

(0.001)

(0.002)

(0.001)

Regulatory quality ( $R{Q}_{it}$ )

0.249

0.071

0.249

0.071**

(0.252)

(0.061)

(0.138)

(0.019)

Interaction terms ( $y_{it}\ast R{Q}_{it}$ )

2.232***

1.239**

2.232**

1.239*

(0.584)

(0.547)

(0.610)

(0.587)

Fluctuations in the terms of trade ( $T{E}_{it}$ )

−1.380***

−0.663**

−1.380***

−0.663**

(0.342)

(0.262)

(0.126)

(0.207)

GDP per capita ( $PIB{H}_{it}$ )

0.007***

−0.000

0.007*

−0.000

(0.002)

(0.000)

(0.003)

(0.000)

Inflation ( $INFL{T}_{it}$ )

0.002*

0.000

0.002***

0.000*

(0.001)

(0.000)

(0.000)

(0.000)

DUM

−0.013

−0.057

−0.013

−0.057

(0.061)

(0.064)

(0.054)

(0.056)

Constant

0.101

0.101*

(0.081)

(0.044)

Comments

114

120

114

120

Number of id

6

6

6

6

AR (1)

0.061

0.002

0.050

0.142

AR (2)

0.533

0.851

0.602

0.879

Sargan

0.233

0.177

0.233

0.177

Hansen

1.000

1.000

Prob > F

0.000

0.048

0.000

0.000

Number of inst

26

28

26

28