An Exploration of the Private Sector Response to Changes in Government Saving Across OECD Countries

Alun Thomas

No 2001/069, IMF Working Papers from International Monetary Fund

Abstract: Several recent papers have examined the response of national saving to changes in fiscal policy. This paper uses knowledge about the intergenerational fiscal position of a country to determine whether this information helps to explain cross country differences in the nature of the response. Using OECD data the paper finds that in countries in intergenerational fiscal balance, the private sector completely offsets fiscal policy changes whereas in other countries the private sector offset is only partial. Moreover, in countries with large intergenerational fiscal imbalances, strong fiscal consolidation packages reduce the impact of changes in fiscal policy on national saving.

Keywords: WP; fiscal policy; intergenerational fiscal balance; Ricardian effects; national saving; saving rate; government saving; expenditure coefficient; saving position; Fiscal consolidation; Private savings; Fiscal stance; Europe (search for similar items in EconPapers)
Pages: 26
Date: 2001-05-01
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2001/069

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