The global dimension to fiscal sustainability

Byrne, J.P., Fiess, N. and MacDonald, R. (2011) The global dimension to fiscal sustainability. Journal of Macroeconomics, 33(2), pp. 137-150. (doi: 10.1016/j.jmacro.2011.01.002)

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This paper provides a new perspective of fiscal sustainability and financial globalization in emerging and industrial countries. We highlight the importance of global capital market shocks for fiscal sustainability, a relationship which has hitherto been ignored in the empirical literature. Using a factor model we demonstrate that the relationship between deficit and debt is conditional upon a global factor and we suggest that this global factor is related to world-wide liquidity. We also demonstrate that this acts as a constraint on emerging market economies’ fiscal pol

Item Type:Articles
Glasgow Author(s) Enlighten ID:MacDonald, Professor Ronald and Fiess, Dr Norbert and Byrne, Dr Joseph
Authors: Byrne, J.P., Fiess, N., and MacDonald, R.
Subjects:H Social Sciences > HB Economic Theory
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:Journal of Macroeconomics
Published Online:05 February 2011
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