Fiscal Policy and Macroeconomic Stability : Automatic Stabilizers Work, Always and Everywhere /

The paper revisits the link between fiscal policy and macroeconomic stability. Two salient features of our analysis are (1) a systematic test for the government's ambivalent role as a shock absorber and a shock inducer-removing a downward bias present in existing estimates of the impact of auto...

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Detalhes bibliográficos
Autor principal: Debrun, Xavier
Outros Autores: Kapoor, Radhicka
Formato: Periódico
Idioma:English
Publicado em: Washington, D.C. : International Monetary Fund, 2010.
Colecção:IMF Working Papers; Working Paper ; No. 2010/111
Acesso em linha:Full text available on IMF
Descrição
Resumo:The paper revisits the link between fiscal policy and macroeconomic stability. Two salient features of our analysis are (1) a systematic test for the government's ambivalent role as a shock absorber and a shock inducer-removing a downward bias present in existing estimates of the impact of automatic stabilizers-and (2) a broad sample of advanced and emerging market economies. Results provide strong support for the view that fiscal stabilization operates mainly through automatic stabilizers. Also, the destabilizing impact of policy changes not systematically related to the business cycle may not be as robust as suggested in the literature.
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Descrição Física:1 online resource (46 pages)
Formato:Mode of access: Internet
ISSN:1018-5941
Acesso:Electronic access restricted to authorized BRAC University faculty, staff and students