Search results for "Fiscal Consolidation"

showing 10 items of 12 documents

A competing risks tale on successful and unsuccessful fiscal consolidations

2019

Abstract This paper analyses the transitions out of fiscal consolidations using annual data for 17 industrial countries over the period 1975-2013 and applying a discrete-time competing risks duration model. Our approach allows us to distinguish the factors behind a successful or an unsuccessful end of fiscal consolidation episodes. The results show that economic and political factors, the size and typology of fiscal adjustments and the occurrence of crises explain the differences in the length and the success/failure of fiscal consolidations. Moreover, while fiscal adjustment programmes that end successfully display positive duration dependence, those that end in an unsuccessful manner are …

040101 forestryTypologyEconomics and Econometrics050208 financeApplied economics05 social sciencesDuration dependenceSettore SECS-P/02 Politica Economica04 agricultural and veterinary sciencesMonetary economicsFiscal consolidations Discrete duration data Competing risks Multinomial logitCompeting risksConsolidation (business)0502 economics and business8. Economic growthEconomics0401 agriculture forestry and fisheriesFiscal adjustmentFinanceMultinomial logistic regression
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Fiscal Adjustment and Business Cycle Synchronization

2013

Using a panel of annual data for 20 countries we show that synchronized fiscal consolidation (stimulus) programmes in different countries make their business cycles more closely linked, especially in the case of fiscal adjustments lasting 2 or 3 years. We also find: (i) little evidence of decoupling when an inflation targeting regime is unilaterally adopted; (ii) an increase in business cycle synchronization when countries fix their exchange rates and become members of a monetary union; (iii) a positive effect of bilateral trade on the synchronization of business cycles.

Bilateral tradeStimulus (economics)Consolidation (business)jel:C41Inflation targetingjel:E62EconomicsBusiness cycleMonetary economicsBusiness cycle synchronizationFiscal consolidation fiscal stimulus business cycle synchronizationSSRN Electronic Journal
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Is fiscal fatigue a threat to consolidation programmes?

2015

Building on a narrative approach to identify episodes of fiscal consolidation, data for a group of 17 industrial countries over the period 1978-2009 and continuous-time duration models, we find evidence suggesting that the likelihood of a fiscal consolidation ending increases over time, but only for programs that last less than six years. Additionally, fiscal consolidations tend to last longer in non-European than in European countries. Our results emphasize that chronic fiscal imbalances might lead to a vicious austerity cycle, while discipline in the behaviour of fiscal authorities is a means of achieving credible and shorter adjustment measures. Therefore, fiscal fatigue is likely to com…

Economic growthPublic AdministrationEconomic policyCompromisemedia_common.quotation_subjectGeography Planning and DevelopmentSocial SciencesDuration dependenceManagement Monitoring Policy and LawEnvironmental Science (miscellaneous)Weibull modelConsolidation (business)Change pointEconomicsmedia_commonScience & TechnologyDuration analysi1. No povertySettore SECS-P/02 Politica EconomicaAusterityFiscal consolidationDuration analysis8. Economic growthChange pointsChange-pointsDuration dependenceEnvironment and Planning C: Government and Policy
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How does fiscal consolidation impact on income inequality?

2012

In this paper, we assess the impact of fiscal consolidation on income inequality. Using a panel of 18 industrialized countries from 1978 to 2009, we find that income inequality significantly rises during periods of fiscal consolidation. In addition, while fiscal policy that is driven by spending cuts seems to be detrimental for income distribution, tax hikes seem to have an equalizing effect. We also show that the size of the fiscal consolidation program (in percentage of GDP) has an impact on income inequality. In particular, when consolidation plans represent a small share of GDP, the income gap widens, suggesting that the burden associated with the effort affects disproportionately house…

Economics and EconometricsLabour economicsInequalitymedia_common.quotation_subjectSocial Sciencesfiscal consolidationEconomic inequalityKuznets curveIncome distribution0502 economics and businessEconomics050207 economicsFscal consolidationIncome inequalityKuznets curve10. No inequalitymedia_common050205 econometrics 050208 finance05 social sciences1. No povertyGross incomeSettore SECS-P/02 Politica EconomicaFiscal unionFiscal policyFiscal consolidation income inequality Kuznets curveIncome inequality metrics8. Economic growthD63E62E64
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The Impact of Fiscal Consolidation on Human Development

2018

We find that fiscal austerity is associated with a reduction of human development standards, with the negative effect being particularly severe in the case of spending-driven consolidation episodes. Fiscal adjustments are especially damaging for human development in developing countries (namely, African and Latin American countries). Additionally, the empirical evidence shows that (i) government stability is a crucial institutional determinant of human development, and (ii) while investment in physical capital can boost human development, government consumption and inflation are detrimental to it.

Fiscal consolidationGeography Planning and DevelopmentRisk ratingEconomic and social determinantDevelopment3304 EducationPoliticalHuman development
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National fiscal consolidations and regional inequality in Europe

2016

Using annual data for 13 European countries over the period 1980-2008, we assess the impact of national fiscal consolidations on the income inequality of European regions. Regional dispersion increases in the outcome of consolidation episodes, particularly, when packages are more severe and implemented through spending cuts rather than tax rises. From a policy perspective, these findings suggest that fiscal consolidations driven by reductions in government spending can exacerbate regional disparities and may ultimately counteract the European policy efforts to promote territorial cohesion. Our results are robust to alternative inequality measures, the occurrence of crisis episodes and the e…

MacroeconomicsEconomics and EconometricEconomics and EconometricsSociology and Political ScienceInequalitymedia_common.quotation_subjectGeography Planning and Development0211 other engineering and technologies02 engineering and technologyfiscal consolidationregional inequalityConsolidation (business)Economic inequality0502 economics and businessDevelopment economicsEconomics050207 economicsmedia_commonGovernment spending05 social sciences1. No povertySettore SECS-P/02 Politica Economica021107 urban & regional planningR1Fiscal unionEuropean policyEurope JEL Classifications: D638. Economic growthE62E64Cambridge Journal of Regions, Economy and Society
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Fiscal adjustments and income inequality: a first assessment

2012

Using a statistical approach to identify fiscal adjustments, we find that fiscal consolidation appears to shorten the income gap. Fiscal austerity plans that succeed in bringing public debt to a sustainable path seem to be more likely to reduce inequality. Expansionary fiscal adjustments are particularly important to promote changes in the income distribution.

MacroeconomicsEconomics and EconometricsInequalitymedia_common.quotation_subjectSocial SciencesOpennessKuznets curveEconomic inequalityIncome distributionDebt0502 economics and businessEconomics050207 economicsKuznets curve10. No inequalityInequality fiscal consolidation Kuznets curve opennessmedia_common050208 finance05 social sciences1. No povertySettore SECS-P/02 Politica EconomicaFiscal unionAusterityIncome inequality metricsInequalityFiscal consolidation8. Economic growth
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What determines the duration of a fiscal consolidation program?

2013

This paper assesses the determinants of the length of fiscal consolidation using annual data for 17 industrial countries over the period 1978-2009. Relying on a narrative approach to identify fiscal consolidation episodes, we show that fiscal variables (such as the budget deficit and the level of public debt) and economic factors (such as the degree of openness, the inflation rate, the interest rate and per capita GDP) are crucial for the fiscal consolidation process. Additionally, we employ duration analysis over a set of consolidation spells and find that, as time goes by, the likelihood of a fiscal consolidation ending is higher. However, the hazard function is not monotonic: indeed, it …

NinthMacroeconomicsEconomics and Econometricsjel:C41Fiscal consolidationsmedia_common.quotation_subjectjel:E62Social Sciencesfiscal consolidations duration analysis Weibull model cubic splines.Monetary economicsGross domestic productConsolidation (business)Weibull modelCubic splinesDebt0502 economics and businessEconomicsOpenness to experience050207 economicsmedia_commonGovernment spending050208 finance05 social sciencesDuration analysi1. No povertySettore SECS-P/02 Politica EconomicaFiscal Consolidation Duration Analysis Weibull Model cubic splines.Interest rateDeficit spendingC41Fiscal consolidation8. Economic growthDuration analysisE62Finance
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Fiscal Adjustments and Business Cycle Synchronization

2013

Using a panel of annual data for 20 countries we show that synchronized fiscal consolidation (stimulus) programmes in different countries make their business cycles more closely linked, especially in the case of fiscal adjustments lasting 2 or 3 years. We also find: (i) little evidence of decoupling when an inflation targeting regime is unilaterally adopted; (ii) an increase in business cycle synchronization when countries fix their exchange rates and become members of a monetary union; (iii) a positive effect of bilateral trade on the synchronization of business cycles

Settore SECS-P/02 Politica Economicafiscal consolidation fiscal stimulus business cycle synchronization
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HOW DO FISCAL CONSOLIDATION AND FISCAL STIMULI IMPACT ON THE SYNCHRONIZATION OF BUSINESS CYCLES?

2017

Using quarterly data for a panel of advanced economies, we show that synchronized fiscal consolidation (stimulus) programmes in different countries make their business cycles more closely linked. We also find: (i) some evidence of decoupling when an inflation targeting regime is unilaterally adopted; (ii) an increase in business cycle synchronization when countries fix their exchange rates and become members of a monetary union; (iii) a positive effect of bilateral trade on the synchronization of business cycles. Global factors, such as a rise in global risk aversion and uncertainty and a reversal of nonstandard expansionary monetary policy, can also reduce the degree of co-movement of busi…

fiscal consolidationEconomics and EconometricsC41Fiscal consolidationJEL classification numbersFiscal stimulusbusiness cycle synchronizationE62Business cycle synchronizationfiscal stimulu
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