Fiscal Space: Concept, Measurement, and Policy Implications
4 Pages Posted: 29 Nov 2018 Last revised: 27 Apr 2020
Date Written: November 1, 2018
Effective fiscal policy depends on the amount of budget resources available to raise spending or lower taxes without jeopardizing fiscal sustainability. This resource availability is often called fiscal space. Since the global financial crisis, fiscal space in emerging market and developingeconomies has narrowed. This makes these economies more vulnerable to sudden spikes in financing costs and limits their ability to counteract adverse shocks.
Keywords: Public Sector Economics, Public Finance Decentralization and Poverty Reduction, Economic Adjustment and Lending, Macro-Fiscal Policy, Macroeconomics and Economic Growth, Economic Policy, Institutions and Governance, Fiscal & Monetary Policy, Labor Markets
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