This paper studies the effects of fiscal policy response in 118 episodes of systemic banking crisis in advanced and emerging market countries during 1980-2008. It finds that timely countercyclical fiscal measures contribute to shortening the length of crisis episodes by stimulating aggregate...

Intro -- Contents -- I. INTRODUCTION -- II. CONCEPTUAL FRAMEWORK -- III. EMPIRICAL FINDINGS OF THE CROSS-COUNTRY STUDY -- IV. APPLICATION TO JAMAICA -- V. POLICY IMPLICATIONS -- VI. SUMMARY AND CONCLUSIONS -- A. DATA SOURCES AND DEFINITIONS AND COUNTRY GROUPING -- B. DEBT-INFLATION TRAP AND DEBT...