IDEAS home Printed from https://ideas.repec.org/p/imf/imfwpa/1996-059.html
   My bibliography  Save this paper

An Empirical Analysis of Fiscal Adjustments

Author

Listed:
  • Mr. Robert F. Westcott
  • Mr. C. John McDermott

Abstract

This study uses the fiscal expansion and consolidation experiences of the industrial countries over the period 1970 to 1995 to examine the interplay between fiscal adjustments and economic performance. A key finding is that fiscal consolidation need not trigger an economic slowdown. Fiscal consolidation that concentrates on the expenditure side, and especially on transfers and government wages, is more likely to succeed in reducing the public debt ratio than tax-based consolidation. Also, the greater the magnitude of the fiscal consolidation, the more likely it is to succeed in reducing the debt ratio.

Suggested Citation

  • Mr. Robert F. Westcott & Mr. C. John McDermott, 1996. "An Empirical Analysis of Fiscal Adjustments," IMF Working Papers 1996/059, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:1996/059
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=2018
    Download Restriction: no
    ---><---

    Other versions of this item:

    More about this item

    Keywords

    WP; GDP; business cycle; expenditure cut; present discounted value; spending cut; consumption puzzle; expenditure measure; interest rate movement; debt to GDP; ratio of debt; contractionary monetary policy; investment expenditure cut; adjusted expenditure; industrial country GDP growth; Fiscal consolidation; Fiscal stimulus; Fiscal stance; Global; fiscal consolidation need; consolidation experience; characteristics of fiscal consolidation; interest rate premium; expenditure side;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:1996/059. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Akshay Modi (email available below). General contact details of provider: https://edirc.repec.org/data/imfffus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.