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Sovereign Risk, Fiscal Policy, and Macroeconomic Stability
Giancarlo CorsettiMr.Keith KuesterMr.Andre MeierMr.Gernot J. Mueller
出版International Monetary Fund, 2012-01-01
主題Business & Economics / Public FinanceBusiness & Economics / Banks & BankingBusiness & Economics / Investments & Securities / General
ISBN14639770779781463977078
URLhttp://books.google.com.hk/books?id=mun1qeWHg_kC&hl=&source=gbs_api
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註釋This paper analyzes the impact of strained government finances on macroeconomic stability and the transmission of fiscal policy. Using a variant of the model by Curdia and Woodford (2009), we study a "sovereign risk channel" through which sovereign default risk raises funding costs in the private sector. If monetary policy is constrained, the sovereign risk channel exacerbates indeterminacy problems: private-sector beliefs of a weakening economy may become self-fulfilling. In addition, sovereign risk amplifies the effects of negative cyclical shocks. Under those conditions, fiscal retrenchment can help curtail the risk of macroeconomic instability and, in extreme cases, even stimulate economic activity.