Hien Thi Kim Nguyen
School of Economics and Finance
Victoria University of Wellington
Institutional Affiliation: Victoria University of Wellington
NBER Working Papers and Publications
|September 2018||Fiscal Space and Government-Spending & Tax-Rate Cyclicality Patterns: A Cross-Country Comparison, 1960-2016|
with Joshua Aizenman, Yothin Jinjarak, Donghyun Park: w25012
This paper compares fiscal cyclicality across advanced and developing countries, geographic regions as well as income levels over 1960–2016 period, then identifies factors that explain countries’ government spending and tax-policy cyclicality. Public debt/tax base ratio provides a more robust explanation for government-spending cyclicality than public debt/output ratio but the reverse is true when capital investment is accounted for in government spending. On average, a more indebted (relative to tax base) government spends more in good times and cuts back spending indifferently compared with a low-debt country in bad times. We also find that country’s sovereign wealth fund has a countercyclical effect in our estimation. Finally, the analysis depicts a significant economic impact of an end...
Published: Joshua Aizenman & Yothin Jinjarak & Hien Thi Kim Nguyen & Donghyun Park, 2019. "Fiscal Space and Government-Spending & Tax-Rate Cyclicality Patterns: A Cross-Country Comparison, 1960–2016," Journal of Macroeconomics, .