Procyclical emerging market policy: New evidence by Otaviano Canuto, Francisco Carneiro, Leonardo Garrido published by VOXEU (7/2015).
Industrialised and developing countries have differing fiscal strategies for dealing with the business cycle. But are countries’ strategies different according to whether they are industrialised? This column presents new evidence suggesting that the picture is complex. Procyclical fiscal policies remain the norm amongst most non-industrialised developing countries, but some key developing countries have recently moved toward a counter-cyclical stance as a result of strengthening institutions.