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Asia and Pacific > India

You are looking at 1 - 2 of 2 items for :

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  • Expectations; Speculations x
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Cover IMF Working Papers
The Distributional Effects of Government Spending Shocks in Developing Economies
Davide Furceri
,
Jun Ge
,
Mr. Prakash Loungani
, and
Mr. Giovanni Melina
We construct unanticipated government spending shocks for 103 developing countries from 1990 to 2015 and study their effects on income distribution. We find that unanticipated fiscal consolidations lead to a long-lasting increase in income inequality, while fiscal expansions lower inequality. The results are robust to several measures of income distribution and size of the fiscal shocks, to an alternative identification strategy, across expansions and recessions and across country groups (low-income countries versus emerging markets). An additional contribution of the paper is the computation of the medium-term inequality multiplier. This is on average about 1 in our sample, meaning that a cumulative decrease in government spending of 1 percent of GDP over 5 years is associated with a cumulative increase in the Gini coefficient over the same period of about 1 percentage point. The multiplier is larger for total government expenditure than for public investment and consumption (with the former having larger effect), likely due to the redistributive role of transfers. Finally, we find that (unanticipated) fiscal consolidations lead to an increase in poverty.
Keywords:
WP; government spending shock; Fiscal policy; Fiscal shocks; Inequality; Income distribution; inequality multiplier; net income inequality; government spending response; government-spending ratio; growth shock; government spending contraction; government expenditure forecast; Income inequality; Total expenditures; Public investment spending; Global; Sub-Saharan Africa
Cover IMF Working Papers
Information Rigidity in Growth Forecasts: Some Cross-Country Evidence
Ms. Natalia T. Tamirisa
,
Mr. Prakash Loungani
, and
Mr. Herman O. Stekler
We document information rigidity in forecasts for real GDP growth in 46 countries over the past two decades. We investigate: (i) if rigidities are lower around turning points in the economy, such as in times of recessions and crises; (ii) if rigidities differ across countries, particularly between advanced countries and emerging markets; and (iii) how quickly forecasters incorporate news about growth in other countries into their growth forecasts, with a focus on how advanced countries‘ growth forecasts incorporate news about emerging market growth and vice versa.
Keywords:
WP; data set; Information rigidity; forecasts; recessions; crises; banking crisis; recession episode; recession year; possibility recession; banking crises episode; Banking crises; Rational expectations; Emerging and frontier financial markets; Vector autoregression; Middle East; Western Hemisphere; Europe; Africa; Asia and Pacific