Powered by OpenAIRE graph
Found an issue? Give us feedback
addClaim

From Fiscal Cyclicality to Fiscal Stress

Authors: Riera-Crichton, Daniel; Ruiz Orrico, Pilar; Vuletin, Guillermo;

From Fiscal Cyclicality to Fiscal Stress

Abstract

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.

Country
United States
Related Organizations
Keywords

BUSINESS CYCLE, DOWNWARD RIGIDITY, 330, PUBLIC CONSUMPTION, CYCLICALITY

  • BIP!
    Impact byBIP!
    selected citations
    These citations are derived from selected sources.
    This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
    0
    popularity
    This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
    Average
    influence
    This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
    Average
    impulse
    This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
    Average
Powered by OpenAIRE graph
Found an issue? Give us feedback
selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
0
Average
Average
Average
Green