World uncertainty and national fiscal balances
ABSTRACTThe Great Recession and the COVID-19 pandemic shared two of its critical macroeconomic consequences: a major increase in world uncertainty and great stress on public finances. In this paper, we show that not only these are not independent phenomena but, on the contrary, world economic uncert...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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Taylor & Francis Group
2023-12-01
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| Series: | Journal of Applied Economics |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/15140326.2023.2242110 |
| _version_ | 1797404425639165952 |
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| author | Trang Thi Thuy Nguyen Binh Thai Pham Hector Sala |
| author_facet | Trang Thi Thuy Nguyen Binh Thai Pham Hector Sala |
| author_sort | Trang Thi Thuy Nguyen |
| collection | DOAJ |
| description | ABSTRACTThe Great Recession and the COVID-19 pandemic shared two of its critical macroeconomic consequences: a major increase in world uncertainty and great stress on public finances. In this paper, we show that not only these are not independent phenomena but, on the contrary, world economic uncertainties are relevant in determining country-specific fiscal balances. We provide consistent evidence for 143 countries over the period 1990–2019 that the former harms fiscal balances irrespective of the degree of economic development. In this way, an increase of 0.1 points in the world uncertainty index triggers, on average, 0.15 GDP percentage points deterioration in the fiscal balance. This average value is subject to significant non-linearities characterized by larger negative effects the higher the fiscal balance is. In a critical period in which public debts have climbed to unprecedented historical levels, economic stability appears as a non-negligible factor in the forthcoming process of public accounts rebalancing. |
| first_indexed | 2024-03-09T02:54:47Z |
| format | Article |
| id | doaj.art-200b4df189c24ffaa2011b0668bcdaa2 |
| institution | Directory Open Access Journal |
| issn | 1514-0326 1667-6726 |
| language | English |
| last_indexed | 2024-03-09T02:54:47Z |
| publishDate | 2023-12-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Journal of Applied Economics |
| spelling | doaj.art-200b4df189c24ffaa2011b0668bcdaa22023-12-05T07:07:33ZengTaylor & Francis GroupJournal of Applied Economics1514-03261667-67262023-12-0126110.1080/15140326.2023.2242110World uncertainty and national fiscal balancesTrang Thi Thuy Nguyen0Binh Thai Pham1Hector Sala2Faculty of Business Administration, Van Lang University, Ho Chi Minh City, VietnamCollege of Economics, Law and Government, University of Economics Ho Chi Minh City, Ho Chi Minh City, VietnamDepartament d’Economia Aplicada, Universitat Autònoma de Barcelona, Barcelona, SpainABSTRACTThe Great Recession and the COVID-19 pandemic shared two of its critical macroeconomic consequences: a major increase in world uncertainty and great stress on public finances. In this paper, we show that not only these are not independent phenomena but, on the contrary, world economic uncertainties are relevant in determining country-specific fiscal balances. We provide consistent evidence for 143 countries over the period 1990–2019 that the former harms fiscal balances irrespective of the degree of economic development. In this way, an increase of 0.1 points in the world uncertainty index triggers, on average, 0.15 GDP percentage points deterioration in the fiscal balance. This average value is subject to significant non-linearities characterized by larger negative effects the higher the fiscal balance is. In a critical period in which public debts have climbed to unprecedented historical levels, economic stability appears as a non-negligible factor in the forthcoming process of public accounts rebalancing.https://www.tandfonline.com/doi/10.1080/15140326.2023.2242110Uncertaintypublic deficitfiscal balance(un)conditional quantile regression |
| spellingShingle | Trang Thi Thuy Nguyen Binh Thai Pham Hector Sala World uncertainty and national fiscal balances Journal of Applied Economics Uncertainty public deficit fiscal balance (un)conditional quantile regression |
| title | World uncertainty and national fiscal balances |
| title_full | World uncertainty and national fiscal balances |
| title_fullStr | World uncertainty and national fiscal balances |
| title_full_unstemmed | World uncertainty and national fiscal balances |
| title_short | World uncertainty and national fiscal balances |
| title_sort | world uncertainty and national fiscal balances |
| topic | Uncertainty public deficit fiscal balance (un)conditional quantile regression |
| url | https://www.tandfonline.com/doi/10.1080/15140326.2023.2242110 |
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