Journal Archive

Home > Journal Archive
Cover Image
  • P-ISSN 1738-656X

한국개발연구. Vol. 28, No. 2, December 2006, pp. 51-96

× KDI Open Access is a program of fully open access journals to facilitate the widest possible dissemination of high-quality research. All research articles published in KDI JEP are immediately, permanently and freely available online for everyone to read, download and share in terms of the Creative Commons Attribution 4.0 International License.

An Evaluation of Fiscal Policy Response to Economic Cycles

Sam-Ho Lee

Author & Article History

Manuscript .


Two conditions should be satisfied if fiscal policy is to stabilize economic cycles; proper policy timing and significant policy effect. This paper evaluates whether the policy timing has been proper in Korea by investigating the correlation between fiscal policy stance and economic conditions. We first calculate quarterly FIs (Fiscal Impulse) using the estimated potential GDP and fiscal balance data. Based on these indices, we 1) analyze how FIs respond to the economic conditions summarized in GDP gap through regression analysis, 2) compare average FIs in expansionary and recessionary periods according to the NSO's economic cycles, 3) evaluate fiscal policy maker's perception of economic conditions and its intention by reviewing the budget proposals. Although regression analysis shows that overall fiscal policy, especially expenditure side, has properly responded to economic conditions, average FIs do not show the significant difference between expansionary and recessionary periods. It is inconclusive whether the fiscal policy timing has been proper. Budget proposals show that actual fiscal policy stance has been sometimes inconsistent with the policy intention, which implies that it is hard to utilize fiscal policy actively to stabilize the economy.


재정정책(Fiscal Policy), 재정충격지수(Fiscal Impulse(FI)), 경기순환(Economic Cycles)

JEL Code

E62, H62

상단으로 이동