Debt Reduction, Fiscal Adjustment, and Growth in Credit-Constrained Economies /

This paper assesses the effects of fiscal consolidations associated with public debt reduction on medium-term output growth during periods of private debt deleveraging. The analysis covers 107 countries and 79 episodes of public debt reduction driven by discretionary fiscal adjustments during 1980-2...

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Autor principal: Baldacci, Emanuele
Altres autors: Gupta, Sanjeev, Mulas-Granados, Carlos
Format: Revista
Idioma:English
Publicat: Washington, D.C. : International Monetary Fund, 2013.
Col·lecció:IMF Working Papers; Working Paper ; No. 2013/238
Accés en línia:Full text available on IMF
Descripció
Sumari:This paper assesses the effects of fiscal consolidations associated with public debt reduction on medium-term output growth during periods of private debt deleveraging. The analysis covers 107 countries and 79 episodes of public debt reduction driven by discretionary fiscal adjustments during 1980-2012. It shows that expenditure-based, front-loaded fiscal adjustments can dampen growth when there are credit supply restrictions. Instead, fiscal adjustments that are gradual and rely on a mix of revenue and expenditure measures can support output expansion, while reducing public debt. In this context, protecting public investment is critical for medium-term growth, as is the implementation of supply-side, productivity-enhancing reforms.
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Descripció física:1 online resource (37 pages)
Format:Mode of access: Internet
ISSN:1018-5941
Accés:Electronic access restricted to authorized BRAC University faculty, staff and students