Productive development, global integration, and fiscal response functions in developed and developing countries: An empirical study

Botta, Alberto and Yajima, Giuliano and Spinola, Danilo and Porcile, Gabriel (2026) Productive development, global integration, and fiscal response functions in developed and developing countries: An empirical study. Working Paper. Post Keynesian Economics Society. (Submitted)

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Abstract

This paper investigates the determinants of fiscal policy responses to public debt in developed and emerging and developing economies, focusing on the role of productive structures and international economic integration.

Using data covering 1980–2018 and a two-stage least squares estimation strategy, the analysis examines cyclically adjusted primary balances and fiscal response functions. The findings highlight the importance of manufacturing development for fiscal sustainability, differences in debt responses between developed and developing economies, and the influence of international financial conditions on fiscal policy.

The results suggest that productive diversification and the structure of international financial integration are important determinants of fiscal policy space, particularly in developing economies.

Item Type:	Monograph (Working Paper)
Dates:	Date Event 11 May 2026 Published
Uncontrolled Keywords:	Fiscal response function, Public debt, Structural change
Subjects:	CAH15 - social sciences > CAH15-02 - economics > CAH15-02-01 - economics
Divisions:	Business School > Accountancy, Finance and Economics Business School > Accountancy, Finance and Economics > Centre for Accountancy Finance and Economics
Depositing User:	Gemma Tonks
Date Deposited:	02 Nov 2026 15:48
Last Modified:	02 Nov 2026 15:48
URI:	https://www.open-access.bcu.ac.uk/id/eprint/17288

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