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The Role for Counter-Cyclical Fiscal Policy in Singapore

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  • Leif Lybecker Eskesen

Abstract

Singapore's policymakers have often used fiscal policy as a counter-cyclical tool. Empirical results based on a structural autoregression framework suggest that fiscal policy can be used for demand management, although the impact may be somewhat short lived. The short-lived impact could reflect a number of factors, including the absence of credit-constrained economic agents, a high propensity to save among households, monetary focus on price stability, and leakages due to economic openness. Notwithstanding, fiscal policy should still play a key stabilizing role in the current downturn given the downside risks to growth and the vast fiscal space.

Suggested Citation

  • Leif Lybecker Eskesen, 2009. "The Role for Counter-Cyclical Fiscal Policy in Singapore," IMF Working Papers 09/8, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:09/8
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    References listed on IDEAS

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    Cited by:

    1. Jha, Shikha & Mallick, Sushanta K. & Park, Donghyun & Quising, Pilipinas F., 2014. "Effectiveness of countercyclical fiscal policy: Evidence from developing Asia," Journal of Macroeconomics, Elsevier, vol. 40(C), pages 82-98.
    2. Kester Guy & Anton Belgrave, 2012. "Fiscal Multiplier in Microstates: Evidence from the Caribbean," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 18(1), pages 74-86, February.
    3. Tang, Hsiao Chink & Liu, Philip & Cheung, Eddie C., 2013. "Changing impact of fiscal policy on selected ASEAN countries," Journal of Asian Economics, Elsevier, vol. 24(C), pages 103-116.

    More about this item

    Keywords

    External shocks; Economic models; Economic stabilization; Cross country analysis; Fiscal policy; Price stabilization; Singapore; SVAR; expenditure; fiscal multipliers; fiscal stimulus; fiscal shocks;

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