Fiscal Policy for the Crisis

Spilimbergo, Antonio; Symansky, Steven; Blanchard, Olivier; Cottarelli, Carlo

doi:10.1002/9781118266588.ch72

Cited by 21 publications

(37 citation statements)

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“…the exchange rate regime dummy and the change of fiscal balance, are not statistically significant. The latter finding is in line with the conclusions of Taylor (2009) and Spilimbergo et al (2009). According to Taylor (2009), the government transfers to families in the United States did not increase personal consumption expenditures due to the unpredictability of government policies.…”

Section: Estimation Resultssupporting

confidence: 85%

“…Countries with more restrictions on international trade tend to recover faster than those with fewer restrictions. As the crisis deepens, there is increasing pressure to raise trade barriers such as non‐tariff protection to limit imports, or introduce various forms of export subsidies (see Spilimbergo et al, 2009). However, countries depending on trade will recover faster from the crisis.…”

Section: Estimation Resultsmentioning

confidence: 99%

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Labor Market Flexibility and the Impact of the Financial Crisis

Artha

Haan

2011

Kyklos

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The recent financial crisis, which originated in the US, has also hit the rest of the world. However, the impact of the crisis on economic activity varies widely across countries, reflecting differences in exposure and vulnerability to financial crises, heterogeneity in macroeconomic structures, and differences in policy responses (Berkmen et al., 2009). A few recent studies have examined the impact of the global financial crisis on output identifying factors that may explain cross-country differences in the impact of the financial crisis. For instance, Berkmen et al. (2009) find that countries with more leveraged domestic financial systems and more rapid growth in lending to the private sector tended to suffer more from the crisis, while countries exporting advanced manufacturing goods were more affected than those exporting food. Also countries with pegged exchange-rate regimes fared significantly worse than countries with a more flexible exchange rate regime. 1 Up to now, there is no study examining the relationship between labor market flexibility and the impact of the financial crisis on output. 2 This paper examines for 56 countries over the period of 2007 until the first quarter of 2010 whether cross-country differences in the impact of the financial crisis on the loss of output and the duration of the crisis are related to differences in labor market flexibility. We measure the output loss by the decrease of real GDP from peak to through. Likewise, the duration of the crisis is the length of the period between the peak and the through of real GDP. Employing a cross-country model that includes control variables such as trade and capital market

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Section: Estimation Resultssupporting

confidence: 85%

Section: Estimation Resultsmentioning

confidence: 99%

Labor Market Flexibility and the Impact of the Financial Crisis

Artha

Haan

2011

Kyklos

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“…This depends on the level of debt, interest rates, the multiplier of expenditure, the capacity for collecting taxes and efficiency in doing so, the size of the national financial markets and their prestige as subjects of creditors, and the credibility of the government as a borrower. In the present world economic recession, the International Monetary Fund (IMF) has exerted pressure on countries to adopt a more expansionist fiscal policy (Spilimbergo, Symansky, Blanchard & Cottarelli, 2008). 27 In the declaration of the G20 conference held in London in April 2008, the countries belonging to the group undertook to make a fiscal effort on the scale necessary to reestablish growth and permitted the IMF to increase its capacity to lend in these circumstances (Declaration by the Leaders of the G20, 2009).…”

Section: The Handling Of the Crisesmentioning

confidence: 99%

“…Although the magnitude of the response required is not specified, it is stated that this should be timely, of considerable size, lasting, diversified, contingent, collective, and sustainable. See Spilimbergo et al. (2008).…”

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confidence: 99%

Comparative Analysis of the Crises and Financial Rescue Operations in Mexico (1995) and the United States (2008)

Yglesias¹

2010

Latin American Policy

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The frequency of financial crises in recent decades makes an in‐depth study of the phenomenon imperative. Particular attention should be paid to the points that the different crises have in common so that financial authorities, regulators, and the actual participants in the financial system can draw lessons. The causes of the crises and the efficacy (or inefficacy) of response by governments are essential aspects that must be studied. Besides sharing a border and having strong economic, social, and cultural links, Mexico and the United States have faced similar financial crises in recent times. The Centro de Estudios Espinosa Yglesias (CEEY) brought together a group of experts in financial systems and public finance to debate the origin of the financial crises and the possibility of anticipating them. This is particularly important since the environment in which we now find ourselves has technical advances and financial innovations that are themselves a source of risk. The experts also analyzed the authorities' response to the crises, the effectiveness of the response, and alternative strategies that might have been applied. Finally, CEEY attempted to find mechanisms that might minimize the risk of financial crises and reduce the cost of the rescue programs. La frecuencia de crisis financieras en décadas recientes hace imperativo un estudio del fenómeno. Debe ponerse un énfasis especial en los puntos que las crisis tienen en común para que las autoridades financieras, los reguladores, y los mismos participantes en el sistema financiero puedan aprender de ellos. Las causas de las crisis y la eficacia (o falta de eficacia) de la respuesta por parte de los gobiernos son aspectos esenciales que deben estudiarse. Además de compartir una frontera y de tener fuertes lazos económicos, sociales y culturales, México y Estados Unidos han enfrentado en fechas recientes crisis financieras parecidas. El Centro de Estudios Espinosa Yglesias (CEEY) reunió a un grupo de expertos en sistemas financieros y finanzas públicas para debatir el origen de las crisis financieras y la posibilidad de anticiparlas. Esto es de particular importancia ya que en la coyuntura en la que nos encontramos existen avances técnicos e innovaciones financieras que en sí implican una fuente de riesgo. Los expertos también analizaron la respuesta de las autoridades a las crisis, la eficacia de la respuesta y las estrategias alternas que hubieran podido llevarse a cabo. Finalmente, el CEEY intentó hallar mecanismos que podrían minimizar el riesgo de crisis financieras y reducir el costo de los programas de rescate.

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“…Support for fiscal activism had largely waned from the 1970s onwards but, at the insistence of the US Obama Administration and the International Monetary Fund, it suddenly revived worldwide during the crisis (see Spilimbergo et al. ). This set a new precedent for internationally coordinated fiscal activism in response to future financial crises.…”

Section: Introductionmentioning

confidence: 99%

The Paradoxes and Pitfalls of Revived Fiscal Activism

Makin

2014

Economic Affairs

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This paper critiques the revival of fiscal activism by the G20 in response to the global financial crisis of 2008–9. It first re‐examines the international macroeconomic conditions leading up to that crisis, before highlighting the paradoxes and pitfalls of revived fiscal activism for advanced economies. It argues that the harmful legacy of budget deficits and escalated public debt levels spawned further financial crises, most notably in southern Europe, and generally damaged household and business confidence to the detriment of private consumption and investment spending, which has delayed economic recovery. To undertake the repair necessary to the fiscal accounts of most advanced economies, the paper proposes that government spending programmes need to be thoroughly reviewed against the key principles of public finance.

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Fiscal Policy for the Crisis

Cited by 21 publications

References 1 publication

Labor Market Flexibility and the Impact of the Financial Crisis

Labor Market Flexibility and the Impact of the Financial Crisis

Comparative Analysis of the Crises and Financial Rescue Operations in Mexico (1995) and the United States (2008)

The Paradoxes and Pitfalls of Revived Fiscal Activism

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