Fiscal Consolidation: What Are the Breakeven Fiscal Multipliers?

Autor:	Jarmila Botev, Annabelle Mourougane
Rok vydání:	2017
Předmět:	Economics and Econometrics media_common.quotation_subject 05 social sciences Geography Planning and Development Monetary economics Fiscal policy Consolidation (business) Debt 0502 economics and business Financial crisis Economics 050207 economics 050205 econometrics Pace media_common
Zdroj:	CESifo Economic Studies.
ISSN:	1612-7501 1610-241X
DOI:	10.1093/cesifo/ifx002
Popis:	This article derives time-varying threshold multipliers for G7 countries and the euro area, above which consolidation will be self-defeating (that is, leading to an increase rather than a decrease in the debt-to-GDP ratio). Simulations suggest that these thresholds have declined since the financial crisis. In addition to the length of the consolidation period, and the pace of consolidation, the initial level of public debt would be the main factor affecting these multipliers. Results are robust to alternative calibration of the model and suggest that it may be advisable to delay consolidation in countries where the recovery is still fragile, as the conditions for fiscal consolidation not to be self-defeating are stricter than those prevailing in the pre-crisis period. Consolidation packages should also rely on measures where multipliers are the lowest to ensure that threshold multipliers are not exceeded.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::5e3fc324eb21bdda949c21f665ba8d05 https://doi.org/10.1093/cesifo/ifx002 Zobrazit plný text záznamu