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Fiscal Policy in Good Times and Bad

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  • Roberto Perotti

Abstract

In the 1980s several countries with large government debt or deficit implemented substantial, and in some cases drastic, deficit cuts. Contrary to widespread expectations, in many cases private consumption boomed rather than contracted. This paper shows that in times of "fiscal stress" shocks to government revenues and, especially, expenditure have very different effects on private consumption than in "normal" times.

Suggested Citation

  • Roberto Perotti, 1999. "Fiscal Policy in Good Times and Bad," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(4), pages 1399-1436.
    • Handle: RePEc:oup:qjecon:v:114:y:1999:i:4:p:1399-1436.
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    File URL: http://hdl.handle.net/10.1162/003355399556304
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    References listed on IDEAS

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