Table 3 shows government fiscal balance as a percent of gross domestic product (GDP) in 1996 for 25 countries (a minus sign indicates a budget deficit)
It is striking that Indonesia had a balanced government budget and none of the Asian countries that experienced a large depreciation had a serious fiscal deficit.
Not surprisingly, the first two columns of Table 4 show that the government budget deficit is not significant in the exchange rate regression, either by itself or with the inclusion of the East Asia dummy.
The R-squared is 0.09 before we include the East Asia dummy and rises to only 0.10 with that dummy
dummy