Revisiting the Evidence on the Cyclicality of Fiscal Policy across the World

doi:10.1596/25285

Publication:
Revisiting the Evidence on the Cyclicality of Fiscal Policy across the World

dc.contributor.author	Garrido, Leonardo
dc.contributor.author	Carneiro, Francisco G.
dc.date.accessioned	2016-10-27T19:52:43Z
dc.date.available	2016-10-27T19:52:43Z
dc.date.issued	2016-10
dc.description.abstract	A large and growing literature has argued that industrialized and developing countries behave very differently in relation to their fiscal policy stances over the business cycle. In this paper, the authors provide new evidence on the cyclicality of fiscal policy across industrialized and developing countries. The authors sample includes 180 countries, of which 134 are developing countries and 46 are high income countries over the period 1980-2012. The authors follow the methodology of Frankel et al. (2013) but at the same time introduce three innovations to the empirical approach. This paper is organized as follows : After Introduction, Section two discusses issues associated with the choice of filter to smooth the proxy variable for fiscal cyclicality while Section three estimates our own Graduating Class under different filtering methods and a country-specific approach to split the sample into two sub-periods. Section four presents an analysis of how the countries in our sample behave over the business cycle. Section five discusses our findings on the empirical determinants of fiscal cyclicality while Section six explores endogeneity issues. Section 7 presents concluding remarks confirming earlier findings in the literature on the causal link between institutional quality and a less pro-cyclical fiscal stance and suggesting policy directions that could be useful to countries interested in strengthening their fiscal positions and becoming better equipped to adopt counter-cyclical fiscal policies	en
dc.identifier	http://documents.worldbank.org/curated/en/2016/10/26853952/revisiting-evidence-cyclicality-fiscal-policy-across-world
dc.identifier.doi	10.1596/25285
dc.identifier.uri	https://hdl.handle.net/10986/25285
dc.language	English
dc.language.iso	en_US
dc.publisher	World Bank, Washington, DC
dc.relation.ispartofseries	MFM Discussion Paper No. 16;
dc.rights	CC BY 3.0 IGO
dc.rights.holder	World Bank
dc.rights.uri	http://creativecommons.org/licenses/by/3.0/igo/
dc.subject	fiscal policy
dc.subject	pro-cyclical fiscal policy
dc.subject	business cycles
dc.title	Revisiting the Evidence on the Cyclicality of Fiscal Policy across the World	en
dc.type	Working Paper	en
dc.type	Document de travail	fr
dc.type	Documento de trabajo	es
dspace.entity.type	Publication
okr.crossref.title	Revisiting the Evidence on the Cyclicality of Fiscal Policy across the World
okr.date.disclosure	2016-10-11
okr.doctype	Publications & Research
okr.doctype	Publications & Research::Working Paper
okr.docurl	http://documents.worldbank.org/curated/en/2016/10/26853952/revisiting-evidence-cyclicality-fiscal-policy-across-world
okr.guid	108441476190296615
okr.identifier.doi	10.1596/25285
okr.identifier.externaldocumentum	090224b084615ed6_1_0
okr.identifier.internaldocumentum	26853952
okr.identifier.report	108904
okr.imported	true
okr.language.supported	en
okr.pdfurl	http://documents.worldbank.org/curated/en/108441476190296615/pdf/108904-WP-PUBLIC-MFM-Discussion-Paper-series.pdf	en
okr.topic	Macroeconomics and Economic Growth::Business Cycles and Stabilization Policies
okr.topic	Macroeconomics and Economic Growth::Fiscal & Monetary Policy
okr.unit	Macro & Fiscal Mgmt - GP (GMFDR)
relation.isAuthorOfPublication	2c308a64-886c-507e-98b9-54f74364d5c4
relation.isAuthorOfPublication.latestForDiscovery	2c308a64-886c-507e-98b9-54f74364d5c4