Published in:IMF Working Paper, Vol. , pp. 1-52, 1996
Extent:
1 Online-Ressource (52 p)
Language:
English
DOI:
10.2139/ssrn.882968
Identifier:
Origination:
Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 1996 erstellt
Description:
This paper studies how the composition of fiscal adjustments influences their likelihood of quot;successquot;, 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