Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
11004866 | Journal of International Money and Finance | 2018 | 17 Pages |
Abstract
A key objective of fiscal policy is to maintain the sustainability of public finances and avoid crises. Remarkably, only a few studies provide empirical analysis on fiscal crises. This paper presents a new database of fiscal crises covering different country groups, including low-income developing countries (LIDCs) that have been mostly overlooked in the past. We also shed some light on policies and economic dynamics around crises. Surprisingly, advanced economies face greater turbulence, with half of them experiencing economic contractions during fiscal crises. Fiscal policy is usually procyclical around fiscal crises and the decline in economic growth is magnified if accompanied by a financial crisis.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Paulo Medas, Tigran Poghosyan, Yizhi Xu, Juan Farah-Yacoub, Kerstin Gerling,