The cyclically-adjusted primary balance. A novel approach for the euro area
This paper presents novel estimates for the cyclically-adjusted primary balance for 18 countries of theEuro area over years 1999–2017. We improve the methodology adopted by the European Commission byusing quarterly rather than annual frequency data and providing accurate identification of the budgetary itemswhose response can be considered automatic to the economic cycle. This disaggregated outcome combinedwith high frequency data marks a significant improvement with respect to previous studies.