Frankel, Jeffrey, Vegh, Carlos & Vuletin, Guillermo.
With the ongoing financial turmoil in Europe, many emerging market countries are now deemed less risky than so-called “advanced” countries. This column examines why this is the case and finds that the cyclicality of a country’s fiscal policy – a sign of its riskiness – is inversely correlated with the quality of the country’s institutions.
Πηγή: Voxeu