On the predictability of narrative fiscal adjustments

Pablo Hernández de Cos () and Enrique Moral-Benito
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Pablo Hernández de Cos: Banco de España

No 1516, Working Papers from Banco de España

Abstract: In an influential paper, Devries et al. (2011) construct narrative series of tax- and spending-based fiscal adjustments for a panel of OECD countries. In this paper, we find that the adjustments based on spending cuts can be predicted on the basis of past output growth and other macroeconomic variables. Moreover, we illustrate that this source of endogeneity may generate significant differences in the estimated multipliers.

Keywords: fiscal adjustment; fiscal multiplier (search for similar items in EconPapers)
JEL-codes: E62 H60 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2015-06
New Economics Papers: this item is included in nep-eec, nep-mac and nep-pbe
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Journal Article: On the predictability of narrative fiscal adjustments (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:1516

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