Found 4 article(s) for author 'Fiscal Adjustment'

Is it the ”How” or the ”When” that Matters in Fiscal Adjustments?

Is it the ”How” or the ”When” that Matters in Fiscal Adjustments? Alberto Alesina, March 2018, Paper, “Using data from 16 OECD countries from 1981 to 2014 we study the effects on output of fiscal adjustments as a function of the composition of the adjustment–that is, whether the adjustment is mostly based on spending cuts or on tax hikes–and of the state of the business cycle when the adjustment is implemented. We find that both the ”how” and the ”when” matter, but the heterogeneity related to the composition is more robust across different specifications. Adjustments based upon permanent spending cuts are consistently much less costly than those based upon permanent tax increases. Our results are generally not explained by different reactions of monetary policy. However, when the domestic central bank can set interest rates–that is outside of a currency union–it appears to be able to dampen the recessionary effects of consolidations implemented during a recession.Link

Tags: , ,

Is it the “How” or the “When” that Matters in Fiscal Adjustments?

Is it the “How” or the “When” that Matters in Fiscal Adjustments?¬†Alberto Alesina, October 2016, Paper, “Using data from 16 OECD countries from 1981 to 2014, we find that the composition of fiscal adjustments is much more important than the state of the cycle in determining their effects on output. Fiscal adjustments based upon spending cuts are much less costly than those based upon tax increases, regardless of whether the adjustment starts in a recession or not.Link

Tags: , , ,

The output effect of fiscal consolidation plans

The output effect of fiscal consolidation plans.¬†Alberto Alesina, June 2015, Paper. “We show that the correct experiment to evaluate the effects of a fiscal adjustment is the simulation of a multi-year fiscal plan rather than of individual fiscal shocks. Simulation of fiscal plans adopted by 16 OECD countries over a 30-year period supports the hypothesis that the effects of consolidations depend on their design. Fiscal adjustments based upon spending cuts are much less costly, in terms of output losses, than tax-based ones and have especially low output costs when they consist of permanent rather than stop-and-go changes in taxes and spending…Link

Tags: , , , ,

The output effect of fiscal consolidation plans

The output effect of fiscal consolidation plans. Alberto Alesina, May 2014, Paper. “We show that the correct experiment to evaluate the effects of a scale adjustment is the simulation of a multi-year fiscal plan rather than of individual scale shocks. Simulation of scale plans adopted by 16 OECD countries over a 30-year period supports the hypothesis that the effects of consolidations depend on their design. Fiscal adjustments based upon spending cuts are much less costly, in terms of output losses, than tax-based ones and have especially low out-put costs when they consist of permanent rather than stop and go…” Link verified September 8, 2014

Tags: , , , , ,