04446oam 22011174 450 991078869680332120230828230406.01-4623-1551-81-4527-6630-41-283-51826-01-4519-0812-19786613830715(CKB)3360000000443995(EBL)3014418(SSID)ssj0000940827(PQKBManifestationID)11547858(PQKBTitleCode)TC0000940827(PQKBWorkID)10955896(PQKB)10329692(OCoLC)712989267(MiAaPQ)EBC3014418(IMF)WPIEE2006016(EXLCZ)99336000000044399520020129d2006 uf 0engtxtccrFiscal Policy and Financial Markets /Bernardin Akitoby, Thomas StratmannWashington, D.C. :International Monetary Fund,2006.1 online resource (26 p.)IMF Working Papers"January 2006."1-4518-6276-8 Includes bibliographical references.""Contents""; ""I. INTRODUCTION""; ""II. PREVIOUS LITERATURE""; ""III. ANALYTICAL FRAMEWORK""; ""IV. CONCLUSIONS AND POLICY IMPLICATIONS""; ""REFERENCES""This paper introduces fiscal policy in a model of sovereign risk spreads ("spreads"). Using panel data from emerging market countries, we find that reductions in public expenditure are a more powerful tool for reducing spreads than increases in revenues. Specifically, cuts in current spending lower spreads by more than cuts in investment spending, and they also lower spreads by more than increases in revenue. We also show that debt-financed current spending increases sovereign risk by more than tax-financed current spending, suggesting that international investors have some preference for the latter. In line with the empirical literature on the determinants of spreads, we find that liquidity and solvency indicators, as well as macroeconomic fundamentals, are also important determinants of spreads.IMF Working Papers; Working Paper ;No. 2006/016Fiscal policyEconometric modelsCapital marketFinancial Risk ManagementimfMacroeconomicsimfPublic FinanceimfInflationimfFiscal PolicyimfInternational Financial MarketsimfFiscal Policies and Behavior of Economic Agents: OtherimfDebtimfDebt ManagementimfSovereign DebtimfNational Government Expenditures and Related Policies: GeneralimfFinancial CrisesimfPrice LevelimfDeflationimfPublic finance & taxationimfEconomic & financial crises & disastersimfCurrent spendingimfFiscal policyimfFiscal consolidationimfExpenditureimfFinancial crisesimfPricesimfExpenditures, PublicimfUnited StatesimfFiscal policyEconometric models.Capital market.Financial Risk ManagementMacroeconomicsPublic FinanceInflationFiscal PolicyInternational Financial MarketsFiscal Policies and Behavior of Economic Agents: OtherDebtDebt ManagementSovereign DebtNational Government Expenditures and Related Policies: GeneralFinancial CrisesPrice LevelDeflationPublic finance & taxationEconomic & financial crises & disastersCurrent spendingFiscal policyFiscal consolidationExpenditureFinancial crisesPricesExpenditures, PublicAkitoby Bernardin1493521Stratmann Thomas1493520DcWaIMFBOOK9910788696803321Fiscal Policy and Financial Markets3823296UNINA