Fiscal stimuli and consolidation in emerging market economies

Investment Management & Financial Innovations

Igor Chugunov¹  Mykola Pasichnyi² 

[1] Doctor of Economic Sciences, Professor, Head of Department of Finance, Kyiv National University of Trade and Economics;Ph.D. (Economics), Associate Professor, Senior Lecturer, Kyiv National University of Trade and Economics;

关键词: cyclically-adjusted budget balance;    economic growth;    fiscal consolidation;    fiscal policy;    fiscal stimuli;    government spending;   

DOI  :  10.21511/imfi.15(4).2018.09

来源: DOAJ

【 摘 要 】

The Great Recession has imposed vital limitations on the policy maker’s ability to react to further economic challenges. In this article, the authors set a purpose to assess the expediency and the size of fiscal consolidation or expansionary measures for countries with emerging markets depending on economic dynamics. The data on the episodes of large changes in fiscal policy, representing both fiscal stimuli and consolidation in Ukraine and in the EU countries with emerging market economies from 2001 to 2017, were evaluated. The authors examined the main reasons of fiscal policy’s volatility and its impact on economic growth. The countries with low and medium level of institutional framework for fiscal policy formulation could face permanent deficit and public debt problem. Episodes of expansionary fiscal adjustments based on government revenues cuts and spending increases were more effective compared with those that were entirely based on spending increases. Empirical investigation showed that successful fiscal consolidation measures obligatory included the government primary spending reduction. In those cases, the budget deficit-to-GDP and public debt-to-GDP ratios were declined. Medium-term priorities to develop the methodical bases of fiscal policy design were justified.

【 授权许可】

Unknown