Article ID Journal Published Year Pages File Type
11004866 Journal of International Money and Finance 2018 17 Pages PDF
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
, , , , ,