The Macroeconomic Effects Of Fiscal Consolidation In Emerging Economies Evidence From Latin America PDF Download
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| Author | : Mr.Yan Carriere-Swallow |
| Publisher | : International Monetary Fund |
| Total Pages | : 42 |
| Release | : 2018-06-13 |
| Genre | : Business & Economics |
| ISBN | : 1484361695 |
Download The Macroeconomic Effects of Fiscal Consolidation in Emerging Economies: Evidence from Latin America Book in PDF, ePub and Kindle
We estimate the short-term effects of fiscal consolidation on economic activity in 14 countries in Latin America and the Caribbean. We examine contemporaneous policy documents to identify changes in fiscal policy motivated by a desire to reduce the budget deficit and not by responding to prospective economic conditions. Based on this narrative dataset, our estimates suggest that fiscal consolidation has contractionary effects on GDP, consistent with a multiplier of 0.9. We find these effects to be close to those in OECD countries based on a similarly constructed dataset (Devries and others, 2011). We also find similar estimation results for the two groups of economies for the effect of fiscal consolidation on the external current account balance, providing support for the twin deficits hypothesis.
| Author | : Martín Ardanaz |
| Publisher | : |
| Total Pages | : |
| Release | : 2019 |
| Genre | : |
| ISBN | : |
Download Fiscal Consolidations and Electoral Outcomes in Emerging Economies Book in PDF, ePub and Kindle
Do voters punish governments that introduce fiscal "austerity" measures? If so, does voter response vary according to the design (composition) of fiscal adjustments? What determines the timing of fiscal consolidations? The empirical literature on the political economy of fiscal adjustments, mostly OECD-based, argues that consolidations do not have significant electoral consequences. This paper re-examines these questions and finds that voters punish fiscal consolidations at the polls in Latin America and the Caribbean (LAC). To explain this result, we focus on the composition and timing of fiscal adjustments episodes. Such episodes rely fundamentally on increasing tax rates and bases of indirect taxes (such as the VAT) that hit broad segments of the population. Moreover, these policies are often implemented when politicians have no choice but to consolidate, that is, under severe economic circumstances. These macro results are corroborated with micro evidence from an original survey experiment that measures voter's fiscal policy preferences over the business cycle in seven countries across Latin America. The experimental evidence shows that respondents prefer expenditure cuts to tax increases during recessions. This begs the question - if tax increases are more electorally costly, why do governments rely on them? It is argued the policy choice set available to pursue fiscal consolidation is relatively narrow in LAC, suggesting that investments in fiscal capacity are needed to expand the policy toolset of governments in the face of negative shocks.
| Author | : International Monetary Fund |
| Publisher | : International Monetary Fund |
| Total Pages | : 40 |
| Release | : 2021-03-18 |
| Genre | : Business & Economics |
| ISBN | : 1513574337 |
Download Fiscal Policy Challenges for Latin America During the Next Stages of the Pandemic: The Need for a Fiscal Pact Book in PDF, ePub and Kindle
The fiscal policy response to the COVID-19 shock in most LAC countries was much larger than during the GFC, suggesting fiscal space was not as tight as expected. We argue that it is feasible and desirable, though not without risks, to embark in a more gradual consolidation path than currently envisaged by several countries in the region. Avoiding an early withdrawal of support in 2021 and 2022 is important given that countries are still facing high rates of contagion and deaths, vaccination will take place very slowly, the economic recovery is partial, uncertain and not strong enough to help those most affected by the twin public health and economic crisis. At the center of this discussion is our conviction that fiscal space is not set in stone and it is endogenous to the medium-term targets and commitments undertaken by governments and congresses throughout the region. Also, revisions to fiscal responsibility frameworks should help anchor fiscal sustainability, as well as improve their effectiveness and flexibility. In this context, low-for-long interest rates and easy market access is generating a situation that, in spite of higher debt levels, interest cost on public debt will remain contained in the foreseeable future. Especially if, as argued in this paper, a more gradual fiscal consolidation path is accompanied with stronger commitments and institutional frameworks that ensure debt is put on a credible downward trajectory once the pandemic is under control. Catalyzing these changes, as well as initiating the debate to design other fiscal reforms to strengthen social protection and increase the progressivity of public finances, would require a broad social consensus and political cohesion around several crucial dimensions of public finances: a fiscal pact. On the other hand, if this agenda is neglected the continuation of low growth, social discontent, and political polarization could drive Latin America towards a very dangerous path of institutional and economic decay.
| Author | : Ms.Era Dabla-Norris |
| Publisher | : International Monetary Fund |
| Total Pages | : 47 |
| Release | : 2018-09-28 |
| Genre | : Business & Economics |
| ISBN | : 1484377451 |
Download Macroeconomic Effects of Tax Rate and Base Changes: Evidence from Fiscal Consolidations Book in PDF, ePub and Kindle
This paper examines the macroeconomic effects of tax changes during fiscal consolidations. We build a new narrative dataset of tax changes during fiscal consolidation years, containing detailed information on the expected revenue impact, motivation, and announcement and implementation dates of nearly 2,500 tax measures across 10 OECD countries. We analyze the macroeconomic impact of tax changes, distinguishing between tax rate and tax base changes, and further separating between changes in personal income, corporate income, and value added tax. Our results suggest that base broadening during fiscal consolidations leads to smaller output and employment declines compared to rate hikes, even when distinguishing between tax types.
| Author | : Ms.Era Dabla-Norris |
| Publisher | : International Monetary Fund |
| Total Pages | : 47 |
| Release | : 2018-10-01 |
| Genre | : Business & Economics |
| ISBN | : 1484379063 |
Download Macroeconomic Effects of Tax Rate and Base Changes: Evidence from Fiscal Consolidations Book in PDF, ePub and Kindle
This paper examines the macroeconomic effects of tax changes during fiscal consolidations. We build a new narrative dataset of tax changes during fiscal consolidation years, containing detailed information on the expected revenue impact, motivation, and announcement and implementation dates of nearly 2,500 tax measures across 10 OECD countries. We analyze the macroeconomic impact of tax changes, distinguishing between tax rate and tax base changes, and further separating between changes in personal income, corporate income, and value added tax. Our results suggest that base broadening during fiscal consolidations leads to smaller output and employment declines compared to rate hikes, even when distinguishing between tax types.
| Author | : Eduardo A. Cavallo |
| Publisher | : Inter-American Development Bank |
| Total Pages | : 121 |
| Release | : 2018-03-15 |
| Genre | : Business & Economics |
| ISBN | : |
Download A Mandate to Grow Book in PDF, ePub and Kindle
The 2018 Macroeconomic Report, A Mandate to Grow, revisits the growth debate that has been raging in the region for the past half century. Viewing the debate from this long-term perspective allows for a focus on the structural factors that have prevented Latin America and the Caribbean from reaching the growth potential required to keep pace with faster growing regions and to fulfill the aspirations of its population.
| Author | : Augusto de la Torre |
| Publisher | : World Bank Publications |
| Total Pages | : 232 |
| Release | : 2006-10-20 |
| Genre | : Business & Economics |
| ISBN | : 0821365444 |
Download Emerging Capital Markets and Globalization Book in PDF, ePub and Kindle
Back in the early 1990s, economists and policy makers had high expectations about the prospects for domestic capital market development in emerging economies, particularly in Latin America. Unfortunately, they are now faced with disheartening results. Stock and bond markets remain illiquid and segmented. Debt is concentrated at the short end of the maturity spectrum and denominated in foreign currency, exposing countries to maturity and currency risk. Capital markets in Latin America look particularly underdeveloped when considering the many efforts undertaken to improve the macroeconomic environment and to reform the institutions believed to foster capital market development. The disappointing performance has made conventional policy recommendations questionable, at best. 'Emerging Capital Markets and Globalization' analyzes where we stand and where we are heading on capital market development. First, it takes stock of the state and evolution of Latin American capital markets and related reforms over time and relative to other countries. Second, it analyzes the factors related to the development of capital markets, with particular interest on measuring the impact of reforms. And third, in light of this analysis, it discusses the prospects for capital market development in Latin America and emerging economies and the implications for the reform agenda.
| Author | : Juan Toro R. |
| Publisher | : International Monetary Fund |
| Total Pages | : 122 |
| Release | : 2010-10-06 |
| Genre | : Business & Economics |
| ISBN | : 1455217611 |
Download From Stimulus to Consolidation Book in PDF, ePub and Kindle
This paper identifies policy tools that could be used for fiscal consolidation in advanced and emerging economies in the years ahead. The consolidation strategy, particularly in advanced countries, should aim to stabilize age-related spending in relation to GDP, reduce non-age-related expenditure ratios, and increase revenues. Bold reforms are needed to offset projected increases in age-related spending, particularly health care. On the revenue side, measures could include improving tax compliance, for example through better international cooperation, as well as increasing the yield from VAT by eliminating exemptions and reduced rates, further developing property taxes, and increasing excise rates within the range of rates already applicable in comparable countries.
| Author | : Mr.Marcello M. Estevão |
| Publisher | : International Monetary Fund |
| Total Pages | : 51 |
| Release | : 2013-05-31 |
| Genre | : Business & Economics |
| ISBN | : 1484304489 |
Download The Economic Effects of Fiscal Consolidation with Debt Feedback Book in PDF, ePub and Kindle
The past several years of recession and slow recovery have raised much interest on the effect of fiscal stimulus on economic activity, even as high public debts in many countries would call for fiscal consolidation. To evaluate the delicate balance between stimulus and consolidation requires measuring the size of fiscal multipliers, which often depends on having quarterly data so that exogenous fiscal policy shocks can be identified. We estimate fiscal multipliers using a novel methodology for identifying fiscal shocks within a structural vector autoregressive approach using annual data while controling for debt feedback effects. The estimation focuses on regions with scarce quarterly data (mostly low-income countries), and uses results for advanced economies, emerging market countries, and other broad groupings for which alternative estimates are available to validate the methodology. Differently from advanced and emerging market economies, fiscal consolidation in low-income countries has only a small temporary negative effect on growth while raising medium-term output. Shifting the composition of public spending toward capital expenditure further supports long-run growth.
| Author | : Richard Hemming |
| Publisher | : International Monetary Fund |
| Total Pages | : 62 |
| Release | : 2002-12 |
| Genre | : Business & Economics |
| ISBN | : |
Download The Effectiveness of Fiscal Policy in Stimulating Economic Activity Book in PDF, ePub and Kindle
This paper reviews the theoretical and empirical literature on the effectiveness of fiscal policy. The focus is on the size of fiscal multipliers, and on the possibility that multipliers can turn negative (i.e., that fiscal contractions can be expansionary). The paper concludes that fiscal multipliers are overwhelmingly positive but small. However, there is some evidence of negative fiscal multipliers.
