The use of large fiscal stimulus packages to dampen the impact of Covid-19 recently has raised concerns about the effectiveness of the discretionary fiscal policy. This paper aims at analysing the feasibility of automatic fiscal stabilisers to mitigate economic fluctuations in the case of...

This paper investigates the relationship between fiscal policy and output volatility in Russian regions between 2000 and 2009. System GMM estimation techniques are used to account for potential endogeneity between output volatility and fiscal developments. Our main finding is that fiscal...

In this paper, a simple methodology to assess the effectiveness of automatic stabilizers is proposed and empirically tested using French data for the period 1970-2000. The paper concludes that fiscal stabilizers have dampened output variability by approximately 35-45 percent depending on the...

The Great Recession has revived aggregate demand management policies. In particular, automatic stabilizers are praised since they are rule based and thus operate swiftly and symmetrically across the cycle. However, automatic stabilizers are not a result of macro design but the structure of the...

Automatic stabilisers are fiscal policy's first line of defence in the face of adverse economic shocks. Automatic stabilisers capture fiscal policy's automatic countercyclical response to the state of the business cycle, and are determined by factors like the progressivity of the tax system, the...

Using data from 29 European countries over 2002Q1-2019Q4, we estimate automatic stabilizers using various techniques, and show that the use of simple measures of government size as proxies is based on assumptions that are unrealistic and potentially misleading. Relaxing these assumptions allows...

This paper investigates the effects of fiscal impulses on macroeconomic variables within a New-Keynesian DSGE framework featuring an informal economy that allows for the examination of the effectiveness of automatic stabilizers in stimulating some selected sub-Saharan African (SSA) economies...

This paper considers the role of fiscal policy in New Zealand's macroeconomic stabilisation. New Zealand's macroeconomic framework is characterised by an institutional arrangement whereby monetary policy has the primary responsibility for macroeconomic stabilisation. In contrast, fiscal policy...

Developing Asia has weathered the global economic crisis well and is experiencing a rapid, robust V-shaped recovery. According to conventional wisdom, the fiscal stimulus packages put in place by the region's governments played a key role in the region's superior postcrisis performance. The...

Several countries have employed countercyclical fiscal policy to ameliorate the impact of the global financial crisis. This study identifies some of the issues and policy implications associated with this policy response in developing countries. Included are case studies of four developing...