This thesis examines the effects of fiscal consolidation on banking sector stability for 53 randomly selected developing and developed countries for the period 1960 to 2017. This thesis includes two parts. The first part investigates a causal link between public debt and primary surplus to estimate the vulnerability of a country to fiscal crisis. In the second part, we analyse the effects of fiscal consolidation on the financial sector stability for all countries and also for the subsamples of vulnerable and non-vulnerable economies.
Year Manuscript Completed
Finance and Financial Management
Fiscal vulnerability; Banking sector stability; Fiscal consolidation; Threshold models.
Primary Language of Manuscript