Absorption Boom and Fiscal Stance: What Lies Ahead in Eastern Europe?

April 1, 2010

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Format: Chicago

Jesmin Rahman. Absorption Boom and Fiscal Stance: What Lies Ahead in Eastern Europe?, (USA: International Monetary Fund, 2010) accessed September 19, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper estimates revenue and expenditure pro-cyclicality with respect to output and domestic absorption in new member states of the European Union and Croatia to assess whether these countries used the boom years of 2003-07 to create sufficient fiscal space. The current crisis has found many countries short of fiscal space. As these countries enter a different phase of capital inflows, some with large vulnerabilities and inflexible monetary policy options, the role of fiscal policy becomes more important. This paper also looks at these issues to see how fiscal policy can play a more effective role in demand management in these countries.

Subject: Expenditure, Fiscal policy, Fiscal space, Output gap, Public debt

Keywords: Country, GDP, Revenue, WP

Publication Details

Pages:

31
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2010/097
Stock No:

WPIEA2010097
ISBN:

9781451982749
ISSN:

1018-5941

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