Fiscal Assessments Through the Lens of Firms: Corporate Perceptions and the Transmission of Fiscal Policy

Jorge Hirs, Leandro Gaston Andrian and Oscar Valencia

No 14475, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: This paper examines how firm perceptions influence the transmission of fiscal policy. Using natural language processing on corporate earnings calls from 51 countries over two decades, we construct Fiscal Perceptions Indicators (FPI) that capture the incidence, risk framing, and tone of fiscal discussions. Periods of heightened fiscal concern are associated with rising sovereign spreads, weaker investment, and slower output growth. In response to exogenous fiscal shocks, effects on spreads and macroeconomic activity vary systematically with firm sentiment: favorable views compress spreads and strengthen demand. These results underscore the role of perceptions in conditioning fiscal transmission and provide a scalable cross-country measure of fiscal views.

Keywords: Fiscal credibility; Fiscal Policy Transmission; sovereign risk (search for similar items in EconPapers)
JEL-codes: C55 D84 E6 E62 H63 (search for similar items in EconPapers)
Date: 2026-01
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Persistent link: https://EconPapers.repec.org/RePEc:idb:brikps:14475

DOI: 10.18235/0013914

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