Cyclicality of fiscal policy: how do Eurozone's fiscal stances change during recessions?

This dissertation presents findings about the cyclicality of fiscal policy in the 19 Eurozone countries during recessions, for the period from 1995 to 2020. A time-varying measure of cyclicality is used to describe both overall and discretionary fiscal policy. The results suggest that during recessions discretionary fiscal policy becomes more pro-cyclical, but overall fiscal policy becomes more counter-cyclical. The results also suggest that the pursuing of a Ricardian fiscal regime by more indebted countries leads to higher counter-cyclicality of fiscal policy.