Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/314235 
Year of Publication: 
2023
Citation: 
[Journal:] Journal of Applied Economics [ISSN:] 1667-6726 [Volume:] 26 [Issue:] 1 [Article No.:] 2242110 [Year:] 2023 [Pages:] 1-28
Publisher: 
Taylor & Francis, Abingdon
Abstract: 
The 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.
Subjects: 
(un)conditional quantile regression
fiscal balance
public deficit
Uncertainty
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.