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About the Author(s)


Carlos A. Vegh is a research associate at the NBER, a non-resident senior fellow at the Brookings Institution, and the Fred H. Sanderson Professor of International Economics at Johns Hopkins University, where he is jointly appointed in the School of Advanced International Studies in Washington, D.C., and the department of economics of the Zanvyl Krieger School of Arts and Sciences in Baltimore.

Vegh's research focuses mainly on monetary and fiscal policy in developing countries. He received his Ph.D. in economics from the University of Chicago in 1987 and spent his early career in the International Monetary Fund Research Department. From 1995 to 2013, he was a tenured professor first at the University of California, Los Angeles, where he also was vice-chair for undergraduate studies, then at the University of Maryland.

He has been co-editor of the Journal of International Economics and the Journal of Development Economics and recently became lead editor of Economia, the journal of the Latin American and Caribbean Economic Association. He has co-edited a volume in honor of Guillermo Calvo and published a graduate textbook on open economy macroeconomics for developing countries. He has been a consultant to the IMF, World Bank, Inter-American Development Bank, and many central banks around the world.

Vegh lives in Bethesda, MD, with his wife, Ratna Sahay, and stepdaughter, Maansi.


1. I use the terms "emerging markets" and "developing countries" interchangeably, since the prototypical developing country that I have in mind has fairly standard fiscal institutions and is reasonably integrated into world capital markets.   Go to ⤴︎
2. Updated from C. Reinhart, G. Kaminsky, and C. Vegh, "When It Rains, It Pours: Procyclical Capital Flows and Macroeconomic Policies," NBER Working Paper 10780, September 2004, and in M. Gertler and K. Rogoff, eds., NBER Macroeconomics Annual 2004, Cambridge, Massachusetts: MIT Press, pp. 11–53.   Go to ⤴︎
3. C. Vegh and G. Vuletin, "How Is Tax Policy Conducted over the Business Cycle?" NBER Working Paper 17753, January 2012, and American Economic Journal: Economic Policy, Vol. 7(3), pp. 327–70.   Go to ⤴︎
4. On the former explanation, see A. Riascos and C. Vegh, "Procyclical Government Spending in Developing Countries: The Role of Capital Market Imperfections" mimeo, University of California, Los Angeles, 2003; G. Cuadra, J. Sanchez, and H. Sapriza, "Fiscal Policy and Default Risk in Emerging Markets," Review of Economic Dynamics, 13(2), 2010, pp. 452–69, and S. Bauducco and F. Caprioli, "Optimal Fiscal Policy in a Small Open Economy with Limited Commitment," Journal of International Economics, 93(2), 2014, pp. 302–15. On the latter explanation, see A. Tornell and P. Lane, "The Voracity Effect," American Economic Review, 89(1), 1999, pp. 22–46, E. Talvi and C. Vegh, "Tax Base Variability and Procyclicality of Fiscal Policy," NBER Working Paper  7499, January 2000, and Journal of Development Economics, 78(1), 2005, pp. 156–90, and A. Alesina and G. Tabellini, "Why is Fiscal Policy Often Procyclical?" NBER Working Paper 11600, September 2005, and Journal of the European Economic Association, 6(5), 2008, pp. 1006–36.   Go to ⤴︎
5. J. Frankel, C. Vegh, and G. Vuletin, "On Graduation from Fiscal Procyclicality," NBER Working Paper 17619, November 2011, and Journal of Development Economics, 100(1), 2013, pp. 32–47.   Go to ⤴︎
6. While 2000 is certainly an arbitrary point to break the sample, minor variations do not make a difference.   Go to ⤴︎
7. For a detailed discussion of the Chilean case, see J. Frankel, "A Solution to Fiscal Procyclicality: The Structural Budget Institutions Pioneered by Chile," NBER Working Paper 16945, April 2011, and Journal Economia Chilena, Central Bank of Chile, 14(2), 2011, pp. 39–78.   Go to ⤴︎
8. J. Frankel, C. Vegh, and G. Vuletin, "On Graduation from Fiscal Procyclicality," NBER Working Paper 17619, November 2011, and Journal of Development Economics, 100(1), 2013, pp. 32–47.   Go to ⤴︎
9. E. Ilzetzki, E. Mendoza, and C. Vegh, "How Big (Small?) Are Fiscal Multipliers?" NBER Working Paper 16479, October 2010, and Journal of Monetary Economics, 60(2), 2013, pp. 239–54.   Go to ⤴︎
10. A. Auerbach and Y. Gorodnichenko, "Fiscal Multipliers in Recession and Expansion," NBER Working Paper 17447, September 2011, and in A. Alesina and F. Giavazzi, eds., Fiscal Policy after the Financial Crisis, Chicago, Illinois: University of Chicago Press, 2013, pp. 63–98.   Go to ⤴︎
11. D. Riera-Crichton, C. Vegh, and G. Vuletin, "Procyclical and Countercyclical Fiscal Multipliers: Evidence from OECD Countries," NBER Working Paper 20533, September 2014, and Journal of International Money and Finance, Vol. 52(C), 2015, pp. 15–31.   Go to ⤴︎
12. C. Vegh and G. Vuletin, "The Road to Redemption: Policy Response to Crises in Latin America," NBER Working Paper 20675, November 2014, and IMF Economic Review, Vol. 62(4), 2014, pp. 526–68.   Go to ⤴︎
13. Recall from Figure 1 that, historically, Greece and Portugal have been the only two industrial countries with procyclical government spending. Further, Figure 2 shows these two countries as "still in school."   Go to ⤴︎
14. C. Vegh and G. Vuletin, "Overcoming the Fear of Free Falling: Monetary Policy Graduation in Emerging Markets," NBER Working Paper 18175, June 2012, and in D. Evanoff, C. Holthausen, G. C. Kaufman, and M. Kremer, eds., The Role of Central Banks in Financial Stability: How Has It Changed? World Scientific Studies in International Economics, Book 30, Singapore: World Scientific Publishing, 2013). Go to ⤴︎

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