The International Monetary

The International Monetary

Fund publishes the World Economic Outlook.

Go to www.imf.org and look at the most recent

version available. Look at the data for the cyclically

adjusted budget deficit (which the World

Economic Outlook calls “General Government

Structural Balance”) for Brazil, China, France,

and Germany from 2000 to 2017. Use the series

for the cyclically adjusted budget

deficit that is measured as a percentage of

potential GDP.

a. Download the data and plot the data in a

graph. Which country relied the most on

discretionary fiscal policy in response to the

financial crisis of 2008 and 2009?

b. How do these countries’ discretionary fiscal

policies compare to the countries in Table 13.1

on p. 476?

c. From 2012 to 2017, which of these four

countries is expected to have the most expansionary

discretionary fiscal policy?

Briefly explain.