Does Austerity Pay Off?

• 成果类型: Article
• 署名作者: Born, Benjamin; Muller, Gernot J.; Pfeifer, Johannes
• 署名单位: Frankfurt School Finance & Management; Centre for Economic Policy Research - UK; Eberhard Karls University of Tubingen; University of Colorado System; University of Colorado Boulder
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/rest_a_00844
• 发表日期: 2020-05
• 页码: 323-338
• 关键词: government spending multipliers; fiscal-policy; budget deficits; debt; shocks; responses; sovereign; RISK

摘要

We investigate empirically how fiscal shocks-unanticipated and exogenous changes of government consumption growth-affect the sovereign default premium. For this purpose, we assemble a new data set for 38 emerging and developed economies. It contains approximately 3,000 observations for the sovereign default premium and three alternative measures of fiscal shocks. We condition our estimates on whether shocks are positive or negative and initial conditions in terms of fiscal stress. An increase of government consumption barely affects the default premium. A reduction raises the premium if fiscal stress is severe but decreases it if initial conditions are benign.