Commited to Flexible Fiscal Rules

Konferenzbeitrag

We study the impact of fiscal rules on macroeconomic performance following natural disaster shocks, using dynamic panel models and quarterly data for 89 countries. We find that countries with fiscal rules perform significantly better in the aftermath of such shocks than countries without rules. GDP, private consumption and investment are persistently higher. The superior performance is associated with more expansionary fiscal policy, which hinges critically on larger fiscal space and escape clauses. We rationalize the findings in a quantitative model of sovereign default. The model replicates the empirical dynamics and shows that tight fiscal rules create fiscal space in good times that can be used in bad times for deficit-spending.

Objekt anzeigen

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2021: Climate Economics

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Fiscal Policy ; Multiple or Simultaneous Equation Models: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models ; Business Fluctuations; Cycles ; National Government Expenditures and Related Policies: General
• Thema: Fiscal policy ; fiscal regimes ; natural disasters

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Pagenhardt, Laura ; Große Steffen, Christoph ; Rieth, Malte
• Ereignis: Veröffentlichung
• (wer): ZBW - Leibniz Information Centre for Economics
• (wo): Kiel, Hamburg
• (wann): 2021

Weitere Informationen

• Handle: http://hdl.handle.net/10419/242330