The Impact of Government Spending on the Duration and the Intensity of Economic Crises: Latin America 1900-2000

Rodrigo Cerda

No 1, Working Papers ClioLab from EH Clio Lab. Instituto de Economía. Pontificia Universidad Católica de Chile

Abstract: We study the role of fiscal expenditure during episodes of economic crises using one century data from 20 Latin American countries. We use output drops as a way of indicating the irruption of economic crises and we are able to document episodes of large output drops and large duration of economic crises, which are the characteristics that vary considerably among countries. We study the duration of crises by means of count data and hazard models while we study the intensity of the crisis by means of growth regressions. Our main finding suggest that fiscal expenditure has low power to shorten economic crises but it might act as an effective instrument to smooth output-drops during crises.

Date: 2009
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Working Paper: The Impact of Government Spending on the Duration and the Intensity of Economic Crises: Latin America 1900-2000 (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ioe:clabwp:1

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