The Role for Counter-Cyclical Fiscal Policy in Singapore

Leif Eskesen

No 2009/008, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; stimulus package; Fiscal policy; SVAR; expenditure measure; tax credit; discretionary fiscal policy; adjusted expenditure shock; fiscal policy in Singapore; Fiscal stimulus; Structural vector autoregression; Global (search for similar items in EconPapers)
Pages: 18
Date: 2009-01-01
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Citations: View citations in EconPapers (5)

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