Fiscal Policy as a Tool for Stabilization in Developing Countries

The financial crisis of 2007/2008, the subsequent great recession in rich countries and its propagation to developing countries has sparked a renewed interest in the role of fiscal policy as a potential countercyclical tool among policymakers and researchers. This paper reviews the state of empirica...

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Main Authors:	Kraay, Aart, Serven, Luis
Format:	Working Paper
Language:	en_US
Published:	World Bank, Washington, DC 2013
Subjects:	economic cycles fiscal policy procyclical bias fiscal multipliers macroeconomic shocks fiscal stimulus
Online Access:	http://hdl.handle.net/10986/16362

id	okr-10986-16362
recordtype	oai_dc
spelling	okr-10986-163622021-04-23T14:03:28Z Fiscal Policy as a Tool for Stabilization in Developing Countries Kraay, Aart Serven, Luis economic cycles fiscal policy procyclical bias fiscal multipliers macroeconomic shocks fiscal stimulus The financial crisis of 2007/2008, the subsequent great recession in rich countries and its propagation to developing countries has sparked a renewed interest in the role of fiscal policy as a potential countercyclical tool among policymakers and researchers. This paper reviews the state of empirical evidence on the effectiveness of discretionary countercyclical fiscal policy by placing a particular emphasis on developing countries. On the whole, successful fiscal interventions of this type have been rare in the developing world. This note also briefly reviews contrasting experiences of success and failure in industrial and developing countries. It concludes with several recommendations motivated by past experiences policymakers should consider before adopting any fiscal responses to the current crisis. 2013-12-05T21:30:04Z 2013-12-05T21:30:04Z 2013-02 http://hdl.handle.net/10986/16362 en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research :: Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	economic cycles fiscal policy procyclical bias fiscal multipliers macroeconomic shocks fiscal stimulus
spellingShingle	economic cycles fiscal policy procyclical bias fiscal multipliers macroeconomic shocks fiscal stimulus Kraay, Aart Serven, Luis Fiscal Policy as a Tool for Stabilization in Developing Countries
description	The financial crisis of 2007/2008, the subsequent great recession in rich countries and its propagation to developing countries has sparked a renewed interest in the role of fiscal policy as a potential countercyclical tool among policymakers and researchers. This paper reviews the state of empirical evidence on the effectiveness of discretionary countercyclical fiscal policy by placing a particular emphasis on developing countries. On the whole, successful fiscal interventions of this type have been rare in the developing world. This note also briefly reviews contrasting experiences of success and failure in industrial and developing countries. It concludes with several recommendations motivated by past experiences policymakers should consider before adopting any fiscal responses to the current crisis.
format	Publications & Research :: Working Paper
author	Kraay, Aart Serven, Luis
author_facet	Kraay, Aart Serven, Luis
author_sort	Kraay, Aart
title	Fiscal Policy as a Tool for Stabilization in Developing Countries
title_short	Fiscal Policy as a Tool for Stabilization in Developing Countries
title_full	Fiscal Policy as a Tool for Stabilization in Developing Countries
title_fullStr	Fiscal Policy as a Tool for Stabilization in Developing Countries
title_full_unstemmed	Fiscal Policy as a Tool for Stabilization in Developing Countries
title_sort	fiscal policy as a tool for stabilization in developing countries
publisher	World Bank, Washington, DC
publishDate	2013
url	http://hdl.handle.net/10986/16362
_version_	1764432973159989248

Fiscal Policy as a Tool for Stabilization in Developing Countries

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