IDEAS home Printed from https://ideas.repec.org/a/cii/cepiie/2022-q3-172-25.html
   My bibliography  Save this article

When do we repair the roof? Insights from responses to fiscal crisis early warning signals

Author

Listed:
  • Jiro Honda
  • René Tapsoba
  • Ismael Issifou

Abstract

Should policymakers wait for fiscal crisis early warning signals before repairing the roof? We answer this question by investigating the interlinkages between early warning signals for fiscal crises, policy responses, and policy outcomes, using a broad panel of 119 countries. We find that fiscal adjustment is a good remedy for countries that act proactively, reducing their likelihood of facing fiscal crisis by up to 60 percent. These findings highlight the prominence of strengthening institutions towards further incentivizing policymakers to repair the roof when the sun is shining.

Suggested Citation

  • Jiro Honda & René Tapsoba & Ismael Issifou, 2022. "When do we repair the roof? Insights from responses to fiscal crisis early warning signals," International Economics, CEPII research center, issue 172, pages 349-367.
    • Handle: RePEc:cii:cepiie:2022-q3-172-25
    as

    Download full text from publisher

    File URL: https://www.sciencedirect.com/science/article/pii/S2110701722000166
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Early warning signal; Fiscal consolidation; Fiscal crisis;
    All these keywords.

    JEL classification:

    • H68 - Public Economics - - National Budget, Deficit, and Debt - - - Forecasts of Budgets, Deficits, and Debt
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cii:cepiie:2022-q3-172-25. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/cepiifr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.