Fiscal space, government spending, and tax rate cyclicality patterns

Fiscal space, government-spending, and tax-rate cyclicality patterns: A cross-country comparison, 1960-2016

The upward trajectory of policy interest levels in OECD countries will impose growing fiscal challenges, testing their fiscal convenience of countercyclical policy and therefore their resilience. This column compares fiscal cyclicality across countries and identifies measures of fiscal space. The results reveal a mixed fiscal scenery, where over fifty percent of countries are characterised by limited fiscal space, and fiscal policy is either procyclical or acyclical.