Was this time different? Fiscal policy in commodity republics

Céspedes, Luis Felipe and Velasco, Andres ORCID: 0000-0003-0441-5062 (2013) Was this time different? Fiscal policy in commodity republics. NBER Working Paper (19748). National Bureau of Economic Research, Cambridge, MA.

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• https://www.nber.org/papers/w19748

Abstract

We revisit the issue of fiscal procyclicality in commodity-rich nations -commodity republics in the nomenclature of this paper. Since commodity prices are plausibly a main driver of fiscal policy outcomes in these countries, we focus on the behavior of fiscal variables across the commodity cycle, in contrast to behavior across the output cycle, which has been the main focus of earlier research on fiscal procyclicality. We present evidence of reduced fiscal policy procyclicality in a number of countries. Our empirical results suggest that improvements in institutional quality have led to a more countercyclical fiscal policy stance in a number of countries. The presence of fiscal rules also seems to have made a difference: countries that use them displayed a larger shift toward fiscal counter-cyclicality between the two episodes.

Item Type:	Monograph (Working Paper)
Official URL:	https://www.nber.org/
Additional Information:	© 2013 The Authors
Divisions:	School of Public Policy ?? SCPP ??
Subjects:	H Social Sciences > HG Finance
JEL classification:	E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy Formation, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook > E62 - Fiscal Policy; Public Expenditures, Investment, and Finance; Taxation F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment; Long-Term Capital Movements F - International Economics > F3 - International Finance > F32 - Current Account Adjustment; Short-Term Capital Movements F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F41 - Open Economy Macroeconomics H - Public Economics > H6 - National Budget, Deficit, and Debt > H60 - General H - Public Economics > H6 - National Budget, Deficit, and Debt > H63 - Debt; Debt Management
Date Deposited:	10 Oct 2019 15:45
Last Modified:	14 Sep 2024 04:06
URI:	http://eprints.lse.ac.uk/id/eprint/102050

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