On the predictability of narrative fiscal adjustments

Pablo Hernández de Cos and Enrique Moral-Benito

Economics Letters, 2016, vol. 143, issue C, 69-72

Abstract: This paper shows that spending-based adjustments identified by DeVries et al. (2011) can be predicted on the basis of past output growth and other macroeconomic variables. Moreover, their contractionary effects vanish once we account for this source of endogeneity while tax-based consolidations remain contractionary.

Keywords: Fiscal adjustment; Fiscal multiplier; Narrative approach (search for similar items in EconPapers)
JEL-codes: E62 H60 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (16)

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Working Paper: On the predictability of narrative fiscal adjustments (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:143:y:2016:i:c:p:69-72

DOI: 10.1016/j.econlet.2016.03.024

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