The Nexus between Fiscal Deficits and Economic Growth in ASEAN

摘要

This study provides new evidence on the nexus between fiscal deficits and economic growth among ASEAN countries in the pre- and post-Global Financial Crisis (GFC) periods. Using annual data from 2001 to 2015, three results stand out. First, fiscal deficits are found to be growth-deteriorating in the pre-Crisis period and growth-enhancing in the post-Crisis period. Second, the impact of fiscal deficits on growth in pre- and post-GFC are robust to different measures of economic growth. Third, among control variables, inflation is important in influencing economic growth in the pre-Crisis period while exchange rate and inflow of foreign direct investment have a positive impact on growth in the post-Crisis period.