IMF Research Bulletin, September 2009 PDF (Adobe DRM) download by Chris Papageorgiou

IMF Research Bulletin, September 2009

INTERNATIONAL MONETARY FUND
Publication date: November 2005
ISBN: 9781451975055
Digital Book format: PDF (Adobe DRM)

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This paper estimates revenue and expenditure pro-cyclicality with respect to output and domestic absorption in new member states of the European Union and Croatia to assess whether these countries used the boom years of 2003-07 to create sufficient fiscal space. The current crisis has found many countries short of fiscal space. As these countries enter a different phase of capital inflows, some with large vulnerabilities and inflexible monetary policy options, the role of fiscal policy becomes more important. This paper also looks at these issues to see how fiscal policy can play a more effective role in demand management in these countries.
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