The effects of fiscal policy after the global recession: Assessing the evidences

Vol. 33 No. 2 (2013)

Apr-Jun / 2013
Published April 1, 2013
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PDF-English

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de Paula, Luiz Fernando, and Manoel Carlos de Castro Pires. 2013. “The Effects of Fiscal Policy After the Global Recession: Assessing the Evidences”. Brazilian Journal of Political Economy 33 (2):315-21. https://centrodeeconomiapolitica.org/repojs/index.php/journal/article/view/314.
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The effects of fiscal policy after the global recession: Assessing the evidences

Luiz Fernando de Paula
Professor of Economics at the University of the State of Rio de Janeiro (UERJ) and Researcher of the National Council of Technological and Scientific Development (CNPq).
Manoel Carlos de Castro Pires
Researcher of the Institute for Applied Economic Research (IPEA), currently at the Executive Secretary of Brazil’s Ministry of Finance.
Brazilian Journal of Political Economy, Vol. 33 No. 2 (2013), Apr-Jun / 2013, Pages 315-321

Abstract

This paper offers a commented review of the most recent empirical studies of the effects of fiscal contraction on economic growth which have helped underpin the prescription that fiscal policy should be expansionary in coming years in order to contain economic semi-stagnation in the developed countries. The paper shows that there is ample literature showing that fiscal expansion helps the economy grow, and that fiscal contraction tends to reduce output and employment in the short term. 

JEL Classification: E61; E62; H3.


Keywords: fiscal consolidation conter-cyclical policy international financial crisis