A cross-country database of fiscal space

Köse, M. Ayhan; Kurlat, Sergio; Ohnsorge, Franziska; Sugawara, Naotaka

doi:10.1016/j.jimonfin.2022.102682

Cited by 74 publications

(26 citation statements)

References 70 publications

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“…As monetary policy tightens and inflation rises, debt sustainability in ECA could be at risk. The fiscal sustainability gap measures the sustainability of medium-term debt projections using underlying assumptions on growth and interest rates, as well as government debt and the primary balance-it is estimated as the difference between the primary balance and the debt-stabilizing primary balance (Kose et al 2017). a A negative (positive) statistic indicates that government debt is on a rising (falling) trajectory.…”

Section: Vulnerabilities To High Debt Levels Amid Rising Inflationmentioning

confidence: 99%

Cooperation of Ukraine with international financial partners in martial law

KLYMENKO¹,

SAVOSTIANENKO²

2022

Fìnansi Ukr.

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Introduction. Strategic directions of Ukraine’s development require improvement of the process of formation and implementation of the state’s foreign policy, the delineation of priority vectors of cooperation with international ?nancial partners, including IFIs. Problem Statement. The need to take into account the challenges and threats that arise in the current realities of the application of programs to support the formation and development of a platform for cooperation with international ?nancial institutions (IFIs) / partners in the martial law in Ukraine. Purpose. To study the state of attraction and use of loans (credits) of IFIs and international partners during the martial law in Ukraine, in particular to identify key areas, objectives, expected results of attracting international ?nancial assistance and prospects for further cooperation in accordance with state policy documents. Methods. General and special methods are used: analysis, synthesis, grouping, description, comparison, theoretical generalization and abstract-logical. Results. The programs of emergency ?nancial support of Ukraine by international ?nancial institutions and other partners in the conditions of martial law are analyzed. Preliminary estimates of the economic losses that Ukraine has already su?ered as a result of the Russian military invasion are analyzed. An analysis of projects and promising areas of development and implementation of postwar reconstruction programs in the framework of international ?nancial cooperation. Conclusions. The need for appropriate legislative regulation to ensure effective, targeted and controlled use of emergency financial resources of international partners involved under new and improved mechanisms is substantiated. It is extremely important to improve or develop regulations in the ?eld of ensuring e?ective international ?nancial cooperation of Ukraine: adoption of a new medium-term Strategy of cooperation with IFIs; formation of scienti?c and methodological approach to assessing ?nancial security of Ukraine in the context of attracting credit and ?nancial resources of IFIs; adoption of a new Partnership Strategy of Ukraine and the World Bank for 2022-2026.

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Section: Vulnerabilities To High Debt Levels Amid Rising Inflationmentioning

confidence: 99%

Cooperation of Ukraine with international financial partners in martial law

KLYMENKO¹,

SAVOSTIANENKO²

2022

Fìnansi Ukr.

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“…Because excessive spending could lead to financial stress or even a financial crisis, any government would have to consider “fiscal space” in its spending (Heller, 2005). While the issue of fiscal space has been discussed in previous literature, there is little consensus on its definition (Cheng & Pitterle, 2018; Kose et al, 2017; Nerlich & Reuter, 2015). The most widely cited definition described fiscal space as the “availability of budgetary room that allows a government to provide resources for the desired purpose without any prejudice to the sustainability of a government's financial position” (Heller, 2005, p. 3).…”

Section: Theoretical Consideration and Hypothesesmentioning

confidence: 99%

Who spends more to combat COVID‐19 social risks and why?

2022

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COVID‐19 has gone beyond a public health crisis and poses a serious threat to people's livelihoods. In response to the growing employment and income crisis, most OECD countries have introduced various policies and programs to alleviate rapidly rising social risks and stabilise people's livelihoods. However, these measures vary, with some governments spending only 1% of GDP in 2020, while others spent more than 10%. We conducted a multiple regression analysis to examine factors associated with the level of additional social spending in 31 OECD countries. The results indicate that lower generosity of unemployment benefits was associated with additional social policy spending. However, contrary to the hypothesis, higher additional spending was found among countries with higher levels of government debt. We ended with policy recommendations.

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“…where pc,t is the primary balance (in percent of GDP) in country c in year t, i is the nominal long-term bond yield (with a 10-year or close maturity) in local currency, γ is nominal GDP growth in local currency, and d * refers to the target debt ratio (in percent of GDP)-this is what is defined as the sustainability gap under current conditions (Kose et al 2017).…”

Section: Deteriorating Debt Sustainabilitymentioning

confidence: 99%

“…The second contribution is that, in examining debt sustainability, this paper goes beyond the simple discussion of interest rate-growth differentials. It uses a metric of sustainability gaps that depend on fiscal balances, long-term interest rates as well as output growth (Kose et al 2017). Debt is not sustainable-despite interest rates being below output growth-if new debt accumulation is rapid, that is, primary deficits are large.…”

Section: Introductionmentioning

confidence: 99%

A Mountain of Debt: Navigating the Legacy of the Pandemic

Kose

Ohnsorge

Sugawara

2022

Journal of Globalization and Development

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The COVID-19 pandemic has triggered a massive increase in global debt levels and exacerbated the trade-offs between the benefits and costs of accumulating government debt. This paper examines these trade-offs by putting the recent debt boom into a historical context. It reports three major findings. First, during the 2020 global recession, both global government and private debt levels rose to record highs, and at their fastest single-year pace, in five decades. Second, the debt-financed, massive fiscal support programs implemented during the pandemic supported activity and illustrated the benefits of accumulating debt. However, as the recovery gains traction, the balance of benefits and costs of debt accumulation could increasingly tilt toward costs. Third, more than two-thirds of emerging market and developing economies are currently in government debt booms. On average, the current booms have already lasted three years longer, and are accompanied by a considerably larger fiscal deterioration, than earlier booms. About half of the earlier debt booms were associated with financial crises in emerging market and developing economies.

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A cross-country database of fiscal space

Cited by 74 publications

References 70 publications

Cooperation of Ukraine with international financial partners in martial law

Cooperation of Ukraine with international financial partners in martial law

Who spends more to combat COVID‐19 social risks and why?

A Mountain of Debt: Navigating the Legacy of the Pandemic

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