The Role for Counter-Cyclical Fiscal Policy in Singapore
IMF Working Papers, January 1, 2009
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Bibliographic details
- Authors: Leif Lybecker Eskesen
- Published: January 1, 2009
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451871555.001
Summary and Context
- Author: Leif Lybecker Eskesen
- Date: January 1, 2009
- Series: Working Paper No. 2009/008
- Issue: 008
- Volume: 2009
- Pages: 18
- DOI: https://doi.org/10.5089/9781451871555.001
- ISBN: 9781451871555
- ISSN: 1018-5941
- Subject: Econometric analysis, Expenditure, Fiscal policy, Fiscal stimulus, Revenue administration, Structural vector autoregression
- Keywords: adjusted expenditure shock, discretionary fiscal policy, expenditure measure, Fiscal policy, fiscal policy in Singapore, Fiscal stimulus, Global, stimulus package, Structural vector autoregression, SVAR, tax credit, WP
Empirical Approach
- Framework used: structural autoregression (Structural vector autoregression, SVAR)
- Main empirical finding: fiscal policy can be used for demand management, although the impact may be somewhat short lived.
Findings on Effectiveness and Transmission
- Fiscal policy has been used frequently by Singapore's policymakers as a counter-cyclical tool.
- The impact of fiscal policy on demand appears to be short lived.
- Possible factors explaining the short-lived impact:
- absence of credit-constrained economic agents,
- a high propensity to save among households,
- monetary policy focus on price stability,
- leakages due to economic openness.
Policy Implications and Recommendations
- Despite the potentially short-lived effects, fiscal policy should play a key stabilizing role in the current downturn given:
- the downside risks to growth,
- the vast fiscal space available to policymakers.
Key Publication Note
- 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.
Source: IMF Working Paper — "The Role for Counter-Cyclical Fiscal Policy in Singapore" by Leif Lybecker Eskesen, Working Paper No. 2009/008 (January 1, 2009).