Joshua Aizenman, Yothin Jinjarak, Hien Thi Kim Nguyen, Donghyun Park, 28 September 2018

The upward trajectory of policy interest rates in OECD countries will impose growing fiscal challenges, testing their fiscal capacity for countercyclical policy and thus their resilience. This column compares fiscal cyclicality across countries and identifies measures of fiscal space. The results reveal a mixed fiscal scenery, where more than half of countries are characterised by limited fiscal space, and fiscal policy is either procyclical or acyclical.

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