Abstract

PONTES, Amanda Santos de Oliveira  and  LOURENCO, André Luís Cabral de. Discretionary Fiscal Policy in Brazil, 1995-2017: Decomposition and Evolution. Inv. Econ [online]. 2020, vol.79, n.313, pp.51-77.  Epub Jan 22, 2021. ISSN 0185-1667.  https://doi.org/10.22201/fe.01851667p.2020.313.76065.

This article aims to evaluate the general (expansionist or contractionist) orientation of the discretionary component of Brazilian fiscal policy in the period 1995-2017, as well as to verify its position in relation to the economic cycle (procyclical or anticyclical). To this end, it proposes and applies a new methodology to separate the discretionary fiscal impulse from the part of the fiscal result arising from the operation of automatic fiscal stabilizers. It concludes that fiscal policy: 1) generated a mostly procyclical (destabilizing) position of its discretionary component, leading it to amplify rather than dampen economic cycles; 2) failed to prevent the public debt GDP ratio from entering the unsustainable path at the end of the period. Suggestions are made to improve its performance.

Keywords : Fiscal policy; Brazil; structural fiscal impulse; decomposition; evolution.

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