IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/8712.html
   My bibliography  Save this paper

When the Cycle Becomes the Trend : The Emerging Market Experience with Fiscal Policy during the Last Commodity Super Cycle

Author

Listed:
  • Amra,Rashaad
  • Hanusch,Marek
  • Jooste,Charl

Abstract

Fiscal buffers have shrunk across the world. This paper argues that limited fiscal room in emerging market economies today is partly due to the commodity super cycle of 2000-15. The super cycle created the mirage that economic performance had structurally improved, mistaking a long, commodity-fueled uptick in the business cycle for higher trend growth. This thinking supported fiscal expansions. When the commodity boom ended, it became apparent that countries had saved less than they should have, and that fiscal policy had, perhaps inadvertently, been pro-cyclical. It left countries with depleted fiscal buffers and large budgets when the cycle came to an end, limiting room for fiscal stimulus when needed. The paper illustrates the argument with reference to the South African experience.

Suggested Citation

  • Amra,Rashaad & Hanusch,Marek & Jooste,Charl, 2019. "When the Cycle Becomes the Trend : The Emerging Market Experience with Fiscal Policy during the Last Commodity Super Cycle," Policy Research Working Paper Series 8712, The World Bank.
    • Handle: RePEc:wbk:wbrwps:8712
    as

    Download full text from publisher

    File URL: http://documents.worldbank.org/curated/en/355881547823983112/pdf/WPS8712.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ekaterina Pirozhkova & Jeffrey Rakgalakane & Luchelle Soobyah Rudi Steinbach, 2023. "EnhancingtheQuarterlyProjectionModel," Working Papers 11044, South African Reserve Bank.
    2. Ekaterina Pirozhkova & Jeffrey Rakgalakane & Luchelle Soobyah & Rudi Steinbach, 2023. "Enhancing the Quarterly Projection Model," Working Papers 11048, South African Reserve Bank.
    3. Christopher Loewald & David Faulkner & Konstantin Makrelov, 2020. "Time consistency and economic growth: A case study of South African macroeconomic policy," Working Papers 842, Economic Research Southern Africa.

    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:wbk:wbrwps:8712. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    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.