| Description |
1 online resource (33 pages) |
| Series |
IMF working paper, 2227-8885 ; WP/11/41 |
|
IMF working paper ; WP/11/41
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| Contents |
Cover Page; Title Page; Copyright Page; Contents; I. Introduction; II. Background and literature review; III. Measuring Cross-Country Fiscal Stances; 1. Output and absorption cycles in selected countries; 1A. Business Cycle Stylized Facts for Advanced Economies; 1B. Business Cycle Stylized Facts for Emerging Economies; IV. Methodology; 2. Fiscal stance measures in selected countries; V. Data sources and estimation of output and absorption gaps; VI. Fiscal Policy Behavior during absorption cycles; 2. Correlation between Absorption, Output and Fiscal Aggregates |
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3. Differences between Standard and Absorption-Augmented Fiscal Stances4A. Baseline-Fiscal reaction function with output and absorption gaps; 4B. Baseline-With Lag Dependent Variable; 4C. Boom Years with Positive Absorption Gaps; 4D. Bust Years with Negative Absorption Gaps; 4E. Robustness-Pre-2008 Period; 4F. Robustness-Boom Years with Positive Absorption Gaps (Pre-2008 Period); 4G. Robustness-Bust Years with Negative Absorption Gaps (Pre-2008 period); 4H. Fiscal reaction functions by country type; VII. Conclusion; Appendix: Formulas and calculations of absorption-augmented fiscal stance |
| Summary |
Domestic absorption cycles are relevant in assessment and design of fiscal policies. Our cross-country analysis covers 59 advanced and emerging countries for the 1990-2009 period. We show that ignoring domestic absorption cycles leads to biased fiscal stance indicators, for both advanced and emerging economies, by up to 1.5 percent of GDP. The estimates of fiscal policy reaction functions indicate that absorption booms are associated with pro-cyclical fiscal policy. We tackle the endogeneity problem in reactions functions through stripping the cyclical component of the fiscal aggregates. We also find that simple filtering methods in the computation of absorption gaps perform as better as indirect methods of estimating trade balance gaps and stripping of output gaps |
| Bibliography |
Includes bibliographical references |
| Subject |
Business cycles -- Developed countries -- Econometric models.
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Business cycles -- Developing countries -- Econometric models.
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Fiscal policy -- Developed countries -- Econometric models.
|
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Fiscal policy -- Developing countries -- Econometric models.
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| Form |
Electronic book
|
| Author |
Salman, Ferhan, author
|
|
International Monetary Fund. Strategy, Policy, and Review Department, issuing body
|
| ISBN |
1283570165 |
|
1455260363 |
|
1462393918 |
|
9781283570169 |
|
9781455260362 |
|
9781462393916 |
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