Frankel, J., Vegh, C. and Vuletin, G., (2013), “On graduation from fiscal procyclicality”, Journal of Development Economics, 100(1):32-47.
In the past, industrial countries have tended to pursue countercyclical or, at worst, acyclical fiscal policy. In sharp contrast, emerging and developing countries have followed procyclical fiscal policy, thus exacerbating the underlying business cycle. We show that, over the last decade, about a third of the developing world has been able to escape the procyclicality trap and actually become countercyclical. We then focus on the role played by the quality of institutions, which appears to be a key determinant of a country’s ability to graduate. We show that, even after controlling for the endogeneity of institutions and other determinants of fiscal procyclicality, there is a causal link running from stronger institutions to less procyclical or more countercyclical fiscal policy.
Για το Working Paper πατήστε εδώ.
- Vegh, C. and Vuletin, G., (2013), “Tax-policy procyclicality”, VoxEU, 01 Οκτωβρίου.
- IMF, (2013), “Reassessing the Role and Modalities of Fiscal Policy in Advanced Economies”, IMF Policy Paper, 17 Σεπτεμβρίου.
- Princen, S., Mourre, G., (2013), “The role of tax policy in times of fiscal consolidation”, European Economy, Economic Papers N.502.