IDEAS home Printed from https://ideas.repec.org/a/imx/journl/v16y2021i3a1.html
   My bibliography  Save this article

Public Deficits in USMCA Economies During the COVID-19 Economic Crisis

Author

Listed:
  • Juan Alberto Vázquez Muñoz

    (Benemérita Universidad Autónoma de Puebla, México)

  • Nancy Ivonne Muller Durán

    (Benemérita Universidad Autónoma de Puebla, México)

  • Josué Zavaleta González

    (Benemérita Universidad Autónoma de Puebla, México)

Abstract

Nuestro objetivo es evaluar la polótica fiscal implementada por las economícas del T-MEC para enfrentar la crisis del COVID-19. Estimamos la capacidad económica (producto potencial) y el Balance Primario Cíclico como porcentaje del PIB (CPB) de estas economías. Obtenemos el Balance Primario Ajustado por el Ciclo como porcentaje del PIB (CAPB) como la diferencia entre el Balance Primario (PB) y el CPB. A diferencia de estimaciones previas del CPB, el producto potencial se obtiene mediante la metodología de la Capacidad Económica (Shaikh y Moudud, 2004), que resuelve problemas asociados con metodologías alternativas. Nuestro análisis empírico muestra que existe una asimetría: en Canadá y Estados Unidos la política fiscal es anticíclica y en México es procíclica. México debería abandonar su política fiscal actual; implementar una alternativa de apoyo a los hogares y empresas durante los períodos de crisis y ejecutar una reforma fiscal progresiva. Una limitación de nuestro artículo es que usamos PB y no sus componentes para estimar el CPB; sin embargo, utilizamos series de tiempo más largas, lo que contribuye a obtener resultados más robustos.

Suggested Citation

  • Juan Alberto Vázquez Muñoz & Nancy Ivonne Muller Durán & Josué Zavaleta González, 2021. "Public Deficits in USMCA Economies During the COVID-19 Economic Crisis," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 16(3), pages 1-21, Julio - S.
    • Handle: RePEc:imx:journl:v:16:y:2021:i:3:a:1
    as

    Download full text from publisher

    File URL: https://www.remef.org.mx/index.php/remef/article/view/608
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Alan J. Auerbach & Yuriy Gorodnichenko, 2012. "Measuring the Output Responses to Fiscal Policy," American Economic Journal: Economic Policy, American Economic Association, vol. 4(2), pages 1-27, May.
    2. Berlemann, Michael & Wesselhöft, Jan-Erik, 2012. "Estimating Aggregate Capital Stocks Using the Perpetual Inventory Method – New Empirical Evidence for 103 Countries –," Working Paper 125/2012, Helmut Schmidt University, Hamburg.
    3. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
    4. Alexander Chudik & Kamiar Mohaddes & M. Hashem Pesaran & Mehdi Raissi, 2017. "Is There a Debt-Threshold Effect on Output Growth?," The Review of Economics and Statistics, MIT Press, vol. 99(1), pages 135-150, March.
    5. Carmen M. Reinhart & Kenneth S. Rogoff, 2014. "This Time is Different: A Panoramic View of Eight Centuries of Financial Crises," Annals of Economics and Finance, Society for AEF, vol. 15(2), pages 215-268, November.
    6. Carmen M. Reinhart & Kenneth S. Rogoff, 2010. "Growth in a Time of Debt," American Economic Review, American Economic Association, vol. 100(2), pages 573-578, May.
    7. Cristina Arellano & Yan Bai & Gabriel Mihalache, 2024. "Deadly Debt Crises: COVID-19 in Emerging Markets," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 91(3), pages 1243-1290.
    8. Francesco Giavazzi & Marco Pagano, 1990. "Can Severe Fiscal Contractions Be Expansionary? Tales of Two Small European Countries," NBER Chapters, in: NBER Macroeconomics Annual 1990, Volume 5, pages 75-122, National Bureau of Economic Research, Inc.
    9. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters, in: This Time Is Different: Eight Centuries of Financial Folly, Princeton University Press.
    10. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    11. Philip Arestis & Malcolm Sawyer, 2010. "The return of fiscal policy," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 32(3), pages 327-346, April.
    12. Alan J. Auerbach, 2012. "The Fall and Rise of K eynesian Fiscal Policy," Asian Economic Policy Review, Japan Center for Economic Research, vol. 7(2), pages 157-175, December.
    13. Philip Arestis, 2012. "Fiscal policy: a strong macroeconomic role," Review of Keynesian Economics, Edward Elgar Publishing, vol. 1(0), pages 93-108.
    14. Tobin, James, 1982. "Asset Accumulation and Economic Activity," University of Chicago Press Economics Books, University of Chicago Press, number 9780226805023, June.
    15. Swarnali Ahmed Hannan & Keiko Honjo & Mehdi Raiss, 2022. "Mexico needs a fiscal twist: Response to Covid-19 and beyond," International Economics, CEPII research center, issue 169, pages 175-190.
    16. Pierangelo Garegnani, 2024. "Notes on Consumption, Investment and Effective Demand: II," Springer Studies in the History of Economic Thought, in: Roberto Ciccone (ed.), Capital Theory, the Surplus Approach, and Effective Demand, pages 411-434, Springer.
    17. Alfredo M. Pereira & Jorge M. Andraz, 2005. "Public Investment in Transportation Infrastructure and Economic Performance in Portugal," Review of Development Economics, Wiley Blackwell, vol. 9(2), pages 177-196, May.
    18. Alan J. Auerbach & William G. Gale & Benjamin H. Harris, 2010. "Activist Fiscal Policy," Journal of Economic Perspectives, American Economic Association, vol. 24(4), pages 141-164, Fall.
    19. Amit Bhaduri, 2000. "Nationalism and Economic Policy in the Era of Globalization," WIDER Working Paper Series wp-2000-188, World Institute for Development Economic Research (UNU-WIDER).
    20. Garegnani, Pierangelo, 1979. "Notes on Consumption, Investment and Effective Demand: A Reply to Joan Robinson," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 3(2), pages 181-187, June.
    21. Robinson, Joan, 1979. "Garegnani on Effective Demand," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 3(2), pages 179-180, June.
    22. World Bank, 2020. "The COVID-19 Pandemic [Pandémie De Covid-19]," World Bank Publications - Reports 33696, The World Bank Group.
    23. Anwar M. Shaikh & Jamee K. Moudud, 2004. "Measuring Capacity Utilization in OECD Countries: A Cointegration Method," Economics Working Paper Archive wp_415, Levy Economics Institute.
    24. Gauti B. Eggertsson, 2013. "Fiscal Multipliers and Policy Coordination," Central Banking, Analysis, and Economic Policies Book Series, in: Luis Felipe Céspedes & Jordi Galí (ed.),Fiscal Policy and Macroeconomic Performance, edition 1, volume 17, chapter 6, pages 175-234, Central Bank of Chile.
    25. Olivier Jean Blanchard & Stanley Fischer (ed.), 1990. "NBER Macroeconomics Annual 1990," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262521555, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. M. Ayhan Kose & Franziska Ohnsorge & Naotaka Sugawara, 2020. "Benefits and Costs of Debt: The Dose Makes the Poison," Koç University-TUSIAD Economic Research Forum Working Papers 2006, Koc University-TUSIAD Economic Research Forum.
    2. İbrahim Özmen & Mihai Mutascu, 2024. "Public Debt and Growth: New Insights," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(2), pages 8706-8736, June.
    3. Falilou Fall & Debra Bloch & Jean-Marc Fournier & Peter Hoeller, 2015. "Prudent debt targets and fiscal frameworks," OECD Economic Policy Papers 15, OECD Publishing.
    4. Petra Došenoviæ Bonèa & Maks Tajnikar, 2018. "Austerity policies, economic growth and fiscal balance: lessons from Slovenia," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 36(1), pages 287-308.
    5. Roberto Tamborini & Matteo Tomaselli, 2020. "When does public debt impair economic growth? A literature review in search of a theory," DEM Working Papers 2020/7, Department of Economics and Management.
    6. Paulo André Camuri & Frederico G. Jayme Jr. & Ana Maria Hermeto, 2015. "Fiscal consolidation in developed and emerging economies [Fiscal consolidation in developed and emerging economies]," Nova Economia, Economics Department, Universidade Federal de Minas Gerais (Brazil), vol. 25(spe), pages 835-861, December.
    7. Vassilis Monastiriotis, 2014. "(When) Does Austerity Work? On the Conditional Link between Fiscal Austerity and Debt Sustainability," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 8(1), pages 71-92, June.
    8. Manel Antelo & David Peón, 2014. "Fiscal consolidation and the sustainability of public debt in the GIPSI countries," Cuadernos de Economía - Spanish Journal of Economics and Finance, Asociación Cuadernos de Economía, vol. 37(103), pages 52-71, Abril.
    9. Şen, Hüseyin & Kaya, Ayşe, 2017. "How large are fiscal multipliers in Turkey?," EconStor Preprints 162763, ZBW - Leibniz Information Centre for Economics.
    10. Chibi Abderrahim & Chekouri Sidi Mohamed & Benbouziane Mohamed, 2019. "The Impact of Fiscal Policy on Economic Activity over the Business Cycle: An Empirical Investigation in the Case of Algeria," Review of Middle East Economics and Finance, De Gruyter, vol. 15(3), pages 1-23, December.
    11. Saungweme, Talknice & Odhiambo, Nicholas M, 2019. "Relative impact of domestic and foreign public debt on economic growth in South Africa," Working Papers 25664, University of South Africa, Department of Economics.
    12. Branimir Jovanovic, 2017. "Growth forecast errors and government investment and consumption multipliers," International Review of Applied Economics, Taylor & Francis Journals, vol. 31(1), pages 83-107, January.
    13. João Sousa Andrade & Adelaide Duarte, 2011. "The Fundamentals of the Portuguese Crisis," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 58(2), pages 195-218, June.
    14. Boukraine, Wissem, 2020. "Short and long-run determinants of inflation in Tunisia," MPRA Paper 102014, University Library of Munich, Germany.
    15. Patrick Villieu, 2011. "Quel objectif pour la dette publique à moyen terme ?," Revue d'Économie Financière, Programme National Persée, vol. 103(3), pages 79-98.
    16. Alogoskoufis, George & Malliaris, A.G. & Stengos, Thanasis, 2023. "The scope and methodology of economic and financial asymmetries," The Journal of Economic Asymmetries, Elsevier, vol. 27(C).
    17. Salvador Barrios & Sven Langedijk & Lucio Pench, 2010. "EU fiscal consolidation after the financial crisis. Lessons from past experiences," European Economy - Economic Papers 2008 - 2015 418, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    18. Guerini, Mattia & Moneta, Alessio & Napoletano, Mauro & Roventini, Andrea, 2020. "The Janus-Faced Nature Of Debt: Results From A Data-Driven Cointegrated Svar Approach," Macroeconomic Dynamics, Cambridge University Press, vol. 24(1), pages 24-54, January.
    19. Mr. Emanuele Baldacci & Mr. Sanjeev Gupta & Mr. Carlos Mulas-Granados, 2013. "Debt Reduction, Fiscal Adjustment, and Growth in Credit-Constrained Economies," IMF Working Papers 2013/238, International Monetary Fund.
    20. António Afonso & Jaromír Baxa & Michal Slavík, 2018. "Fiscal developments and financial stress: a threshold VAR analysis," Empirical Economics, Springer, vol. 54(2), pages 395-423, March.

    More about this item

    Keywords

    Primary balance; Fiscal Policy; USMCA economies; COVID-19;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:imx:journl:v:16:y:2021:i:3:a:1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ricardo Mendoza (email available below). General contact details of provider: https://www.remef.org.mx/index.php/remef/index .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.