Abstract
ABSTRACT This paper provides empirical evidence that more export diversification leads to less fiscal procyclicality, which is robust to different specifications and alternative measures after controlling for terms of trade, resource abundance, and institutional quality. We also find that countries that had previously left the fiscal procyclicality trap fell back again during the Great Recession and export structure was a highly correlated factor. We control for potential endogeneity with instrument variables and exploit within-country variations with panel data to further support our empirical findings. Altering fiscal procyclicality is a novel channel through which export structure affects economic growth.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
