Fiscal Sustainability in Developing Asia

Charles Adams, Benno Ferrarini and Donghyun Park
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Charles Adams: National University of Singapore
Benno Ferrarini: Asian Development Bank

No 205, ADB Economics Working Paper Series from Asian Development Bank

Abstract: The central objective of this paper is to empirically examine the issue of fiscal sustainability in developing Asia. To do so, we first diagnose the region’s public finances by analyzing the evolution of key fiscal indicators over time and across subregions. We then estimate fiscal policy response functions that measure the adjustment of the primary fiscal balance to public debt positions. Overall, our results indicate that the region’s public finances are in good shape as a result of responsible fiscal behavior. Nevertheless, failure to withdraw the region’s anticrisis fiscal stimulus in a timely manner may jeopardize fiscal sustainability, bolstering the case for strong medium-term fiscal policy frameworks.

Keywords: Fiscal sustainability; Asia; fiscal policy; fiscal balance; public debt (search for similar items in EconPapers)
JEL-codes: E62 H62 H63 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2010-06
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Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:adbewp:0205

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