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The Impact of Government Spending on the Duration and the Intensity of Economic Crises: Latin America 1900-2000

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  • Rodrigo Cerda

    (Instituto de Economía. Pontificia Universidad Católica de Chile.)

Abstract

We study the role of fiscal expenditure during episodes of economic crises using one century data from 20 Latin American countries. We use output drops as a way of indicating the irruption of economic crises and we are able to document episodes of large output drops and large duration of economic crises, which are the characteristics that vary considerably among countries. We study the duration of crises by means of count data and hazard models while we study the intensity of the crisis by means of growth regressions. Our main finding suggest that fiscal expenditure has low power to shorten economic crises but it might act as an effective instrument to smooth output-drops during crises.

Suggested Citation

  • Rodrigo Cerda, 2009. "The Impact of Government Spending on the Duration and the Intensity of Economic Crises: Latin America 1900-2000," Working Papers ClioLab 1, EH Clio Lab. Instituto de Economía. Pontificia Universidad Católica de Chile.
    • Handle: RePEc:ioe:clabwp:1
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    References listed on IDEAS

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    1. Rodrigo Cerda., 2009. "The Impact of Government Spending on the Duration and the Intensity of Economic Crises: Latin America 1900-2000," Documentos de Trabajo 365, Instituto de Economia. Pontificia Universidad Católica de Chile..
    2. Pappas, Vasileios & Ingham, Hilary & Izzeldin, Marwan & Steele, Gerry, 2016. "Will the crisis “tear us apart”? Evidence from the EU," International Review of Financial Analysis, Elsevier, vol. 46(C), pages 346-360.

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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
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • N16 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Latin America; Caribbean

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