Fiscal Adjustments in OECD Countries : Composition and Macroeconomic Effects /

This paper studies how the composition of fiscal adjustments influences their likelihood of 'success', defined as a long lasting deficit reduction, and their macroeconomic consequences. We find that fiscal adjustments which rely primarily on spending cuts on transfers and the government wa...

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Autor principal: Alesina, Alberto
Altres autors: Perotti, Roberto
Format: Revista
Idioma:English
Publicat: Washington, D.C. : International Monetary Fund, 1996.
Col·lecció:IMF Working Papers; Working Paper ; No. 1996/070
Accés en línia:Full text available on IMF
Descripció
Sumari:This paper studies how the composition of fiscal adjustments influences their likelihood of 'success', defined as a long lasting deficit reduction, and their macroeconomic consequences. We find that fiscal adjustments which rely primarily on spending cuts on transfers and the government wage bill have a better chance of being successful and are expansionary. On the contrary fiscal adjustments which rely primarily on tax increases and cuts in public investment tend not to last and are contractionary. We discuss alterative explanations for these findings by studying both a full sample of OECD countries and by focusing on three case studies: Denmark, Ireland and Italy.
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Descripció física:1 online resource (52 pages)
Format:Mode of access: Internet
ISSN:1018-5941
Accés:Electronic access restricted to authorized BRAC University faculty, staff and students