## Fiscal Crises

_IMF Working Papers, April 3, 2017_

## Source details

**Canonical URL:** [Fiscal Crises](https://www.imf.org/en/publications/wp/issues/2017/04/03/fiscal-crises-44795)

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## Bibliographic details
- Authors: Kerstin Gerling, Paulo A Medas, Tigran Poghosyan, Juan Farah-Yacoub, Yizhi Xu
- Published: April 3, 2017
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781475592153.001

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### Main findings and data coverage
- Presents a new database of fiscal crises covering different country groups, including low-income developing countries (LIDCs).
- Countries faced on average two crises since 1970.
- Highest crisis frequency observed in LIDCs and lowest in advanced economies.
- Pages: 43; Issue: 086; Series: Working Paper No. 2017/086.

### Crisis dynamics by country group
- LIDCs:
  - Often viewed as more vulnerable to shocks, but "appear to suffer the least in crisis periods" according to the data.
- Advanced economies:
  - Face greater turbulence during fiscal crises.
  - "Growth declines sharply in the first two years of the crisis."
  - "Half of them experiencing economic contractions."

### Fiscal policy behavior around crises
- Fiscal policy is usually procyclical:
  - Countries curtail expenditure growth when economic activity weakens.
- Interaction with financial crises:
  - "The decline in economic growth is magnified if accompanied by a financial crisis."

### Keywords and thematic focus
- Subject areas covered: Credit, Debt default, External debt, Financial crises, Fiscal consolidation, Fiscal policy, Money, Public debt.
- Keywords highlighted: banking crisis dummy, Credit, crisis episode, crisis onset, crisis run-up, Debt default, economic growth, Fiscal consolidation, fiscal crisis, Global, public debt debt ratio, real GDP, sovereign debt default, twin crises, WP.

_Imf Working Paper: Kerstin Gerling, Paulo A Medas, Tigran Poghosyan, Juan Farah-Yacoub, Yizhi Xu; April 3, 2017._

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_Source: https://www.imf.org/en/publications/wp/issues/2017/04/03/fiscal-crises-44795_