International Differences in Fiscal Policy During the Global Crisis

46 Pages Posted: 13 Sep 2010

See all articles by Agustín S. Bénétrix

Agustín S. Bénétrix

Trinity College (Dublin)

Philip R. Lane

Trinity College (Dublin) - Department of Economics; Centre for Economic Policy Research (CEPR); Central Bank of Ireland

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Date Written: September 2010

Abstract

We examine the cross-country dispersion in fiscal outcomes during 2007-2009. In principle, international differences in fiscal policy may be related to differences in optimal fiscal positions, funding constraints, political economy factors and fiscal control problems. We find that the decline in the overall and structural fiscal balances have been larger for those countries experiencing larger increases in unemployment and where credit growth during the pre-crisis period was more rapid. However, there is no systematic co-variation between fiscal outcomes and a larger number of other macroeconomic variables and country characteristics.

Suggested Citation

Bénétrix, Agustín and Lane, Philip R., International Differences in Fiscal Policy During the Global Crisis (September 2010). NBER Working Paper No. w16346. Available at SSRN: https://ssrn.com/abstract=1674790

Agustín Bénétrix (Contact Author)

Trinity College (Dublin) ( email )

2-3 College Green
Dublin, Leinster
Ireland

Philip R. Lane

Trinity College (Dublin) - Department of Economics ( email )

Trinity College
Dublin 2
Ireland
+353 1 608 2259 (Phone)
+353 1 677 2503 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Central Bank of Ireland ( email )

P.O. Box 559
Dame Street
Dublin, 2
Ireland

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