Fiscal Issues in Financial Crisis

Vladimir Gligorov

No 373, wiiw Research Reports from The Vienna Institute for International Economic Studies, wiiw

Abstract: Fiscal constraint is potentially lax in catching-up economies, but it has not been abused by most countries considered in this paper. Fiscal risks are significant currently, but sustainability and structural balances are not threatened as a rule, if the return to potential growth rates is to be achieved in the medium run. The risks to countercyclical public financing could be discouraged by a comprehensive EU stabilization policy of some sort. Early euro adoption, absent credible stabilization policy, is not the first best policy option for fiscal policy targets.

Keywords: public debt; sustainability; No-Ponzi game criterion; private debt; foreign debt (search for similar items in EconPapers)
JEL-codes: E62 G18 (search for similar items in EconPapers)
Pages: 31 pages including 11 Figures
Date: 2011-09
New Economics Papers: this item is included in nep-mac
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