We introduce the Global Fiscal Actions (GFA) Dataset, the first quarterly global narrative database of discretionary fiscal policy actions, covering 142 countries since 1990. GFA combines Economist Intelligence Unit country reports with large language models to systematically identify and classify tax and spending measures, together with their motivations, timing, implementation status, and supporting evidence. We validate the dataset against economists' assessments, existing narrative datasets, fiscal aggregates, and repeated AI extractions, demonstrating high accuracy and reproducibility. We illustrate its value through applications to fiscal cyclicality and country-specific fiscal multipliers, providing new evidence on the conduct and effectiveness of fiscal policy worldwide.
This paper analyzes how achieving Europe’s medium-term greenhouse gas mitigation targets enhances energy security, defined as the cushioning of the adverse macroeconomic impact of oil and gas price shocks. It uses the IMF’s Global Macroeconomic Model of the Energy Transition, which combines a rich set of New-Keynesian features with a detailed representation of fossil fuel use, including granular modelling of the transport and heating sectors. Future oil and gas price shocks are simulated in a scenario where Europe’s mitigation policy agenda has been fully implemented (and mitigation targets are met), and in a hypothetical scenario where mitigation policy has remained constant at the current level of ambition. A comparison shows that the policy agenda substantially dampens future shock transmission. The inflationary impact of both shocks is close to 40 percent larger under constant policies than under the mitigation agenda, and for oil shocks, the output decline is about twice as large. These energy security co-benefits materialize gradually as the economy adjusts to the mitigation agenda, and are shown to depend on ETS2, the new emissions trading system covering transportation and buildings. An additional exercise proxies for merit-order electricity pricing. In these simulations, the mitigation agenda further reduces pass-through from gas price shocks to electricity prices, thereby enhancing the macroeconomic stabilizing effects.
How are inflation expectations affected by foreign supply shocks? We show that, beyond bilateral exposure, a second network matters: the one linking forecasters to the countries they cover. Using forecasterlevel expectations around conflict episodes—precisely dated supply shocks that raise inflation through trade and energy linkages—we find that expectations are revised upward gradually in the days following a conflict. Within the same country and day, forecasters who cover the conflict country revise by 0.2 to 0.3 percentage points less than those who do not, and the differential roughly triples where bilateral exposure is highest. We rationalize this in a model where a public narrative overstates spillovers in proportion to bilateral exposure, and only forecasters covering the conflict country can discount it. The consensus therefore inherits a bias largest where exposure is high and coverage thin, and a central bank reading it at face value tightens more than fundamentals warrant.
Revenue mobilization is a key objective in many IMF-supported programs, yet tax revenue-to-GDP forecasts often fall short of outcomes. This paper analyzes the underlying drivers of these forecast misses by leveraging two novel global datasets on tax policy yields and tax administration capacity. It finds that tax revenue-to-GDP forecast errors are primarily driven by over-optimism in forecasted yields of tax policy measures and tax buoyancy assumptions, as well as macroeconomic forecast errors, particularly for growth and trade openness. Stronger tax administration capacity and well-implemented and high-quality revenue related structural reforms are associated with lower forecast errors. Additional empirical analysis shows that over-optimism in forecasted tax policy yields declines significantly when revenue measures are well-designed, part of large-measure revenue packages, and accompanied by high-quality revenue-related structural reforms. Improving forecast realism requires better-grounded yield estimations and tax buoyancy assumptions, explicit consideration of implementation capacity, and a focus on well-designed revenue-related structural reforms.
I study spillovers from U.S. bond supply shocks, identified from yield moves around U.S. Treasury auction announcements. Using the shocks as instruments in daily and monthly local projections for AEs and EMs, I find substantial pass-through to global long-term rates. A debt expansion shock that raises the U.S. 10-year yield by 10 bps lifts foreign 10-year yields by roughly 7 bps within a few business days. Monthly aggregation shows contractionary real effects: U.S. industrial production falls up to 0.4 percent after eight months and foreign industrial production by a comparable amount, around 0.4 percent, with a more persistent profile. The foreign contraction reflects financial tightening, exchange-rate depreciation, and weaker U.S. demand. Spillovers are heterogeneous: moving from the 25th to 75th percentile of foreign investor participation deepens the IP decline by 0.5 pp. Results are robust to a demand-side shock and consistent with the relevant benchmarks, highlighting U.S. bond supply as a key driver of global financial conditions and real activity, amplified by foreign investor participation and weak domestic fundamentals.
