Uncertain Fiscal Consolidations

Huixin Bi, Eric Leeper and Campbell Leith

No 17844, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The paper explores the macroeconomic consequences of fiscal consolidations whose timing and composition are uncertain. Drawing on the evidence in Alesina and Ardagna (2010), we emphasize whether or not the fiscal consolidation is driven by tax rises or expenditure cuts. We find that the composition of the fiscal consolidation, its duration, the monetary policy stance, the level of government debt and expectations over the likelihood and composition of fiscal consolidations all matter in determining the extent to which a given consolidation is expansionary and/or successful in stabilizing government debt.

JEL-codes: E3 E31 E52 E62 (search for similar items in EconPapers)
Date: 2012-02
New Economics Papers: this item is included in nep-cba, nep-mac and nep-pbe
Note: EFG
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Citations: View citations in EconPapers (16)

Published as Huixin Bi & Eric M. Leeper & Campbell Leith, 2013. "Uncertain Fiscal Consolidations," Economic Journal, Royal Economic Society, vol. 0, pages F31-F63, 02.

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Related works:
Journal Article: Uncertain Fiscal Consolidations (2013)
Working Paper: Uncertain Fiscal Consolidations (2013)
Working Paper: Uncertain Fiscal Consolidations (2012)
Working Paper: Uncertain Fiscal Consolidations (2012)
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