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Fiscal Assessments Through the Lens of Firms: Corporate Perceptions and the Transmission of Fiscal Policy

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  • Hirs, Jorge
  • Andrian, Leandro Gaston
  • Valencia, Oscar

Abstract

This paper examines how firm perceptions influence the transmission of fiscal policy. Using natural language processing on corporate earnings calls from 51 countries over two decades, we construct Fiscal Perceptions Indicators (FPI) that capture the incidence, risk framing, and tone of fiscal discussions. Periods of heightened fiscal concern are associated with rising sovereign spreads, weaker investment, and slower output growth. In response to exogenous fiscal shocks, effects on spreads and macroeconomic activity vary systematically with firm sentiment: favorable views compress spreads and strengthen demand. These results underscore the role of perceptions in conditioning fiscal transmission and provide a scalable cross-country measure of fiscal views.

Suggested Citation

  • Hirs, Jorge & Andrian, Leandro Gaston & Valencia, Oscar, 2026. "Fiscal Assessments Through the Lens of Firms: Corporate Perceptions and the Transmission of Fiscal Policy," IDB Publications (Working Papers) 14475, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:14475
    DOI: http://dx.doi.org/10.18235/0013914
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    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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