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Fiscal consolidation after the Great Recession:the role of composition

Iván Kataryniuk () and Javier Valles

No 1515, Working Papers from Banco de España

Abstract: We have examined the fiscal consolidation episodes in a group of OECD countries from 2009 to 2014. The range of the estimated short-term fiscal multiplier runs from 1.2% to 2% of GDP, larger than those obtained in more “normal times”, implying that the contractionary effect has been greater in depressed environments. Nevertheless, we have also found that revenue measures have a higher and more persistent real impact than expenditure measures, which is more consistent with the literature and suggests that expenditure cuts are less harmful for the economy than tax hikes

Keywords: fiscal multipliers; fiscal policy; crisis management (search for similar items in EconPapers)
JEL-codes: E12 E62 E63 H12 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2015-06
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (15) Track citations by RSS feed

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Journal Article: Fiscal consolidation after the Great Recession: the role of composition (2018) Downloads
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