0000000001218657
AUTHOR
R. Sousa
Does Government Spending Crowd Out Private Consumption and Investment?
To counteract the impact of the financial crisis, governments have imple-mented significant fiscal stimulus packages that involve a combination of tax cuts and a boost in social and public infrastructure spending. While, before the turmoil, there was broad consensus that monetary policy should be the primary tool of stabilisation policy, and fiscal policy should play lit-tle role beyond allowing automatic stabilisers to operate, during the crisis almost all major countries adopted discretionary fiscal policy measures. In the debate on the fiscal policy response to the economic downturn, the effectiveness of fiscal policy to support the economy has, there-fore, regained importance and renewe…
The Impact of Fiscal Consolidation on Human Development
We find that fiscal austerity is associated with a reduction of human development standards, with the negative effect being particularly severe in the case of spending-driven consolidation episodes. Fiscal adjustments are especially damaging for human development in developing countries (namely, African and Latin American countries). Additionally, the empirical evidence shows that (i) government stability is a crucial institutional determinant of human development, and (ii) while investment in physical capital can boost human development, government consumption and inflation are detrimental to it.
Political, Institutional, and Economic Factors Underlying Deficit Volatility
It is well known that fiscal policy can counter-cyclically smooth out the effect of unexpected shocks and public deficit volatility may reflect the (optimal) policy response to them. However, the welfare losses associated to fiscal instability are also an important challenge for many countries, as it typically implies an inefficient allocation of resources, higher sovereign risk premium and an inadequate provision of public services. In this paper, we empirically analyze the political, institutional, and economic sources of public deficit volatility. Using the system-generalized method-of-moments (GMM) estimator for linear dynamic panel data models and a sample of 125 countries analyzed fro…
The determinants of public deficit volatility
This paper empirically analyzes the political, institutional and economic sources of public deficit volatility. Using the system-GMM estimator for linear dynamic panel data models and a sample of 125 countries analyzed from 1980 to 2006, we show that higher public deficit volatility is typically associated with higher levels of political instability and less democracy. In addition, public deficit volatility tends to be magnified for small countries, in the outcome of hyper-inflation episodes and for countries with a high degree of openness.
SARS-CoV-2 vaccination modelling for safe surgery to save lives: data from an international prospective cohort study
Abstract Background Preoperative SARS-CoV-2 vaccination could support safer elective surgery. Vaccine numbers are limited so this study aimed to inform their prioritization by modelling. Methods The primary outcome was the number needed to vaccinate (NNV) to prevent one COVID-19-related death in 1 year. NNVs were based on postoperative SARS-CoV-2 rates and mortality in an international cohort study (surgical patients), and community SARS-CoV-2 incidence and case fatality data (general population). NNV estimates were stratified by age (18–49, 50–69, 70 or more years) and type of surgery. Best- and worst-case scenarios were used to describe uncertainty. Results NNVs were more favourable in su…
Fiscal Adjustments and Business Cycle Synchronization
Using a panel of annual data for 20 countries we show that synchronized fiscal consolidation (stimulus) programmes in different countries make their business cycles more closely linked, especially in the case of fiscal adjustments lasting 2 or 3 years. We also find: (i) little evidence of decoupling when an inflation targeting regime is unilaterally adopted; (ii) an increase in business cycle synchronization when countries fix their exchange rates and become members of a monetary union; (iii) a positive effect of bilateral trade on the synchronization of business cycles
Can Fiscal Policy Stimulus Boost Economic Recovery?
We assess the role played by fiscal policy in explaining the dynamics of asset markets. Using a panel of ten industrialized countries, we show that a positive fiscal shock has a negative impact in both stock and housing prices. However, while stock prices immediately adjust to the shock and the effect of fiscal policy is temporary, housing prices gradually and persistently fall. Consequently, the attempts of fiscal policy to mitigate stock price developments (e.g. via taxes on capital gains) may severely de-stabilize housing markets. The empirical findings also point to significant fiscal multiplier effects in the context of severe housing busts, which gives rise to the importance of the im…
Fiscal policy discretion, private spending and crises episodes
In this paper, we assess the impact of fiscal policy discretion on economic activity in the short and medium-term. Using a panel of 132 countries from 1960 to 2008, we find that fiscal policy discretion provides a net stimulus to the economy in the short-run and crowding-in effects are amplified once crisis episodes are controlled for– in particular, banking crises - giving a great scope for fiscal policy stimulus packages. However, crowding-out effects take over in the long-run – especially, in the case of debt crises -, in line with the concerns about long-term debt sustainability.