Fiscal Policy and Default Risk in Emerging Markets

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How is Tax Policy Conducted over the Business Cycle? (2015, background): “…behavior of government spending in developing countries, ranging from limited access to international credit markets (Riascos and Vegh, 2003, Cuadra, Sanchez, and Sapriza, 2010) to political distortions and institutional weaknesses that tend to encourage excessive public spending during…”
Fiscal Rules and the Sovereign Default Premium (2022, unknown): “Because of this, the government borrows less when income is low, and thus, it conducts a procyclical fiscal policy (see Cuadra et al. (2010)).(6) As the fiscal rule forces the debt level to decline, both the level and the volatility of the sovereign spread decline, and the optimal policy becomes les”
Sovereign defaults and banking crises (2018, background): “Thus, if we were to “endogenize” g in this way, the model would be able to account for the observed pro-cyclicality of government spending (see Cuadra et al., 2010). Another alternative is to follow the tradition of Lucas and Stokey (1983) and have g follow an exogenously given stochastic process.”