Fiscal policy in OECD countries found to be procyclical but sustainable.
The study looked at how countries in the OECD changed their fiscal policies in response to economic ups and downs from 1997 to 2018. They found that countries tend to spend more money during economic downturns, but not as much during upturns. This means that fiscal policy is often in line with the state of the economy. However, they did not find strong evidence that countries cut back on spending during downturns to improve their financial situation. The researchers also noted that this pattern was especially noticeable after the Global Financial Crisis.