Challenges of Fiscal Policy in Emerging and Developing Economies

Huidrom, Raju ; Kose, M. Ayhan ; Ohnsorge, Franziska L.

Taylor and Francis

关键词: BUSINESS CYCLES;    FISCAL TRENDS;    FISCAL POLICY;    FISCAL SPACE;    EMERGING MARKET ECONOMIES;   

DOI  :  10.1080/1540496X.2017.1328354
RP-ID  :  129478

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This article presents a systematic analysis of the availability and use of fiscal space in emerging and developing economies. We report two major results. First, emerging and developing economies built fiscal space in the run-up to the Great Recession of 2008–2009, which was then used for stimulus. Since then, fiscal space has shrunk and remains narrow as these economies have taken advantage of historically low interest rates. Second, fiscal policy in emerging and developing economies has become countercyclical (or less procyclical), i.e., “graduated,” since the 1980s, as most clearly demonstrated during the Great Recession. The move towards graduation is most pronounced for those economies with greater fiscal space, which suggests that fiscal space matters for a government’s ability to implement countercyclical fiscal policy.