Fiscal Policy in U.S. and Europe: Macroeconomic Effects on the Medium Term

Ari Aisen; David Moreno

doi:10.4067/S0718-88702011000200003

Authors

Ari Aisen Fondo Monetario Internacional
David Moreno Department of Economics, College Park, MD 20742, 3105 Tydings Hall

DOI:

https://doi.org/10.4067/S0718-88702011000200003

Keywords:

International finance, fiscal policy, emerging markets

Abstract

Notwithstanding the effects of the expansive policies in the advanced economies, due to the 2008 financial crises, could raise their interest rates, generating a crowding-out effect over emerging market debt, this relation could not hold given the better fiscal position of these economies, such as Chile. In particular, higher interest rates in advanced economies could reflect a higher risk of default, consistent with their fiscal fragility.

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Author Biography

David Moreno, Department of Economics, College Park, MD 20742, 3105 Tydings Hall

Department of Economics, College Park, MD 20742, 3105 Tydings Hall

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