Fiscal deficits and growth in developing countries

• 成果类型: Article; Proceedings Paper
• 署名作者: Adam, CS; Bevan, DL
• 署名单位: University of Oxford
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2004.02.006
• 发表日期: 2005
• 页码: 571-597
• 关键词: fiscal deficits; GROWTH; threshold effects; Developing countries

摘要

This paper examines the relation between fiscal deficits and growth for a panel of 45 developing countries. Based on a consistent treatment of the government budget constraint, it finds evidence of a threshold effect at a level of the deficit around 1.5% of GDP. While there appears to be a growth payoff to reducing deficits to this level, this effect disappears or reverses itself for further fiscal contraction. The magnitude of this payoff, but not its general character, necessarily depends on how changes in the deficit are financed (through changes in borrowing or seigniorage) and on how the change in the deficit is accommodated elsewhere in the budget. We also find evidence of interaction effects between deficits and debt stocks, with high debt stocks exacerbating the adverse consequences of high deficits. (c) 2004 Elsevier B.V. All rights reserved.