In this paper, we assess the impact of fiscal policy discretion on economic activity in the short and medium-term. Using a panel of 132 countries from 1960 to 2008, we find that fiscal policy discretion provides a net stimulus to the economy in the short-run and crowding-in effects are amplified once crisis episodes are controlled for– in particular, banking crises - giving a great scope for fiscal policy stimulus packages. However, crowding-out effects take over in the long-run – especially, in the case of debt crises -, in line with the concerns about long-term debt sustainability.

Agnello, L., Furceri, D., Sousa, R. (2011). Fiscal policy discretion, private spending and crises episodes. Banque de France.

Fiscal policy discretion, private spending and crises episodes

AGNELLO, Luca;FURCERI, Davide;
2011-01-01

Abstract

In this paper, we assess the impact of fiscal policy discretion on economic activity in the short and medium-term. Using a panel of 132 countries from 1960 to 2008, we find that fiscal policy discretion provides a net stimulus to the economy in the short-run and crowding-in effects are amplified once crisis episodes are controlled for– in particular, banking crises - giving a great scope for fiscal policy stimulus packages. However, crowding-out effects take over in the long-run – especially, in the case of debt crises -, in line with the concerns about long-term debt sustainability.
Settore SECS-P/02 Politica Economica
http://www.banque-france.fr/uploads/tx_bdfdocumentstravail/DT354.pdf
Agnello, L., Furceri, D., Sousa, R. (2011). Fiscal policy discretion, private spending and crises episodes. Banque de France.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10447/65935
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