Walking Hand in Hand: Fiscal Policy and Growth in Advanced Economies

Carlo Cottarelli and Laura Jaramillo

Review of Economics and Institutions, 2013, vol. 4, issue 2

Abstract: Implementation of fiscal consolidation by advanced economies in coming years needs to take into account the short and long-run interactions between economic growth and fiscal policy. Many countries must reduce high public debt to GDP ratios that penalize long-term growth. However, fiscal adjustment is likely to hurt growth in the short run, delaying improvements in fiscal indicators, including deficits, debt, and financing costs. Revenue and expenditure policies are also critical in affecting productivity and employment growth. This paper discusses the complex relationships between fiscal policy and growth both in the short and in the long run.

Keywords: government debt; budget deficit; growth; advanced economies; sovereign spreads (search for similar items in EconPapers)
JEL-codes: E43 E62 H30 O40 (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
https://rei.unipg.it/rei/article/view/113
Requires registration. Users must be registered and log in to access full text

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pia:review:v:4:y:2013:i:2:n:3

Access Statistics for this article

Review of Economics and Institutions is currently edited by Carlo Andrea Bollino

More articles in Review of Economics and Institutions from Università di Perugia Contact information at EDIRC.
Bibliographic data for series maintained by Ubaldo Pizzoli ().