The Role for Counter-Cyclical Fiscal Policy in Singapore
January 1, 2009
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Summary
Singapore's policymakers have often used fiscal policy as a counter-cyclical tool. Empirical results based on a structural autoregression framework suggest that fiscal policy can be used for demand management, although the impact may be somewhat short lived. The short-lived impact could reflect a number of factors, including the absence of credit-constrained economic agents, a high propensity to save among households, monetary focus on price stability, and leakages due to economic openness. Notwithstanding, fiscal policy should still play a key stabilizing role in the current downturn given the downside risks to growth and the vast fiscal space.
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
Pages:
18
Volume:
2009
DOI:
Issue:
008
Series:
Working Paper No. 2009/008
Stock No:
WPIEA2009008
ISBN:
9781451871555
ISSN:
1018-5941
