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Estimating Fiscal Space: The Theoretical Framework of Ostry et al. Approach

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  • Fatih AKBAYIR
  • Ahmet Burçin YERELİ

Abstract

of the methods to estimate fiscal space. In this direction, “fiscal fatigue” and “debt limit” concepts as well as assumptions are tried to explain. In addition, it is examined whether the approach has holistic basis to estimate properly fiscal space of countries. Consequently, it can be said that the approach is based on relatively sound theoretical frameworks. However, whether the approach keeps pace with the new theoretical developments in the literature and countries’ unique economic experiences will test the validity and topicality of the approach.

Suggested Citation

  • Fatih AKBAYIR & Ahmet Burçin YERELİ, 2019. "Estimating Fiscal Space: The Theoretical Framework of Ostry et al. Approach," Sosyoekonomi Journal, Sosyoekonomi Society, issue 27(39).
    • Handle: RePEc:sos:sosjrn:190114
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    References listed on IDEAS

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    1. Atish R. Ghosh & Jun I. Kim & Enrique G. Mendoza & Jonathan D. Ostry & Mahvash S. Qureshi, 2013. "Fiscal Fatigue, Fiscal Space and Debt Sustainability in Advanced Economies," Economic Journal, Royal Economic Society, vol. 0, pages 4-30, February.
    2. Henning Bohn, 1998. "The Behavior of U. S. Public Debt and Deficits," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(3), pages 949-963.
    3. P. Marcelo Oviedo & Enrique Mendoza, 2004. "Public Debt, Fiscal Solvency, and Macroeconomic Uncertainty in Emerging Markets: The Tale of the Tormented Insurer," Econometric Society 2004 North American Summer Meetings 647, Econometric Society.
    4. Marcelo Oviedo & Enrique G. Mendoza, 2004. "Public Debt, Fiscal Solvency & Macroeconomic Uncertainty in Emerging Markets: The Tale of the Tormented Insurer," 2004 Meeting Papers 14, Society for Economic Dynamics.
    5. Ghosh, Atish R. & Ostry, Jonathan D. & Qureshi, Mahvash S., 2013. "Fiscal space and sovereign risk pricing in a currency union," Journal of International Money and Finance, Elsevier, vol. 34(C), pages 131-163.
    6. Checherita-Westphal, Cristina & Žďárek, Václav, 2017. "Fiscal reaction function and fiscal fatigue: evidence for the euro area," Working Paper Series 2036, European Central Bank.
    7. Frantisek Hajnovic & Juraj Zeman, 2012. "Fiscal Space in the Euro zone," Working and Discussion Papers WP 5/2012, Research Department, National Bank of Slovakia.
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    More about this item

    JEL classification:

    • 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
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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