Fiscal Limits, External Debt, and Fiscal Policy in Developing Countries
2013/08/20
研討會日期 : 2013-08-20
時間 : 14:30
主講人 : Professor Shu-Chun S. Yang
地點 : Conference Room C103
演講者簡介 : Shu-Chun S. Yang received her Ph.D. in Economics from Indiana University in 2003. She is currently Senior Economist in the Research Department of the International Monetary Fund. Her research fields are macroeconomic effects of fiscal policy, macroeconomics, monetary economics and macroeconometrics.
演講摘要 : This paper studies fiscal policy effects in developing countries with external debt and sovereign default risk. State-dependent distributions of fiscal limits are simulated based on macroeconomic uncertainty and fiscal policy specifications. The analysis indicates that expected future revenue plays an important role in the observed low fiscal limits of developing countries relative to those of developed countries. External debt also carries additional risk since large devaluation of the real exchange rate can suddenly raise default probabilities. Consistent with majority views, fiscal consolidations are counterproductive in the short and medium runs, but growth under a faster consolidation eventually outpaces that under a slower one. When an economy approaches it fiscal limits, government spending can be less expansionary. As more revenues are required to service debt in a high-debt state, higher income tax rates raise the economic cost of consumption in terms of leisure foregone, reducing the fiscal multiplier.
