From Fiscal Cyclicality to Fiscal Stress

• Tác giả: Daniel Riera-Crichton
• Ngôn ngữ: eng
• Ký hiệu phân loại: 339.52 Use of fiscal policy
• Thông tin xuất bản: Washington, DC: World Bank, 2024
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 245436
• Chủ đề: 1. BUSINESS CYCLE; 2. CYCLICALITY; 3. DOWNWARD RIGIDITY; 4. PUBLIC CONSUMPTION

Tóm tắt

Macroeconomic textbooks warn that procyclical public spending can amplify economic volatility and cause fiscal stress. However, the latter risks materialize only when governments fail to reduce spending during downturns as much as they increase it during booms. This study investigates asymmetries in the cyclicality of public consumption and finds that emerging markets exhibit "downward rigidity": they boost spending during upswings but do not effectively cut back during downturns. In contrast, advanced economies maintain steady levels of public consumption regardless of economic conditions, making them effectively acyclical. Downward rigidity in public consumption not only paves the way for fiscal stress when the economy slows, but also leads to sustained growth in the size of the state.