Large Changes in Fiscal Policy: Taxes Versus Spending

Alberto Alesina () and Silvia Ardagna

No 15438, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine the evidence on episodes of large stances in fiscal policy, both in cases of fiscal stimuli and in that of fiscal adjustments in OECD countries from 1970 to 2007. Fiscal stimuli based upon tax cuts are more likely to increase growth than those based upon spending increases. As for fiscal adjustments, those based upon spending cuts and no tax increases are more likely to reduce deficits and debt over GDP ratios than those based upon tax increases. In addition, adjustments on the spending side rather than on the tax side are less likely to create recessions. We confirm these results with simple regression analysis.

JEL-codes: H2 H3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-pbe and nep-pub
Date: 2009-10
Note: POL
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (22) Track citations by RSS feed

Published as Alberto Alesina, Silvia Ardagna. "Large Changes in Fiscal Policy: Taxes versus Spending," in Jeffrey R. Brown, editor, "Tax Policy and the Economy, Volume 24" The University of Chicago Press (2010)

Downloads: (external link)
http://www.nber.org/papers/w15438.pdf (application/pdf)

Related works:
Chapter: Large Changes in Fiscal Policy: Taxes versus Spending (2010)
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: http://EconPapers.repec.org/RePEc:nbr:nberwo:15438

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w15438

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc
Address: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Contact information at EDIRC.
Series data maintained by ().