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International Differences in Fiscal Policy During the Global Crisis

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  • Agustín S. Bénétrix
  • Philip R. Lane

Abstract

We examine the cross-country dispersion in fiscal outcomes during 2007-2009. In principle, international differences in fiscal policy may be related to differences in optimal fiscal positions, funding constraints, political economy factors and fiscal control problems. We find that the decline in the overall and structural fiscal balances have been larger for those countries experiencing larger increases in unemployment and where credit growth during the pre-crisis period was more rapid. However, there is no systematic co-variation between fiscal outcomes and a larger number of other macroeconomic variables and country characteristics.

Suggested Citation

  • Agustín S. Bénétrix & Philip R. Lane, 2010. "International Differences in Fiscal Policy During the Global Crisis," NBER Working Papers 16346, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:16346
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    Citations

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    Cited by:

    1. Bénétrix, Agustín S. & Lane, Philip R., 2013. "Fiscal cyclicality and EMU," Journal of International Money and Finance, Elsevier, vol. 34(C), pages 164-176.
    2. Canova, Fabio & Ciccarelli, Matteo, 2013. "Panel vector autoregressive models: a survey," Working Paper Series 1507, European Central Bank.
    3. Agnello, Luca & Dufrénot, Gilles & Sousa, Ricardo M., 2015. "Nonlinear effects of asset prices on fiscal policy: Evidence from the UK, Italy and Spain," Economic Modelling, Elsevier, vol. 44(C), pages 358-362.
    4. Lane, Philip R. & Milesi-Ferretti, Gian Maria, 2012. "External adjustment and the global crisis," Journal of International Economics, Elsevier, vol. 88(2), pages 252-265.
    5. Giancarlo Corsetti & Gernot J. Müller, 2013. "Multilateral Economic Cooperation and the International Transmission of Fiscal Policy," NBER Chapters,in: Globalization in an Age of Crisis: Multilateral Economic Cooperation in the Twenty-First Century, pages 257-297 National Bureau of Economic Research, Inc.
    6. Fatás Antonio & Mihov Ilian, 2012. "Fiscal Policy as a Stabilization Tool," The B.E. Journal of Macroeconomics, De Gruyter, vol. 12(3), pages 1-68, October.
    7. RAMDE, Fousseni, 2015. "Institution, investissements et croissance dans l’UEMOA: une approche panel VAR
      [Institution, investments and growth in WAEMU: a panel VAR approach]
      ," MPRA Paper 82417, University Library of Munich, Germany, revised 01 Jun 2017.

    More about this item

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General

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