Abstract

http://ssrn.com/abstract=1928972
 
 

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Assessing Fiscal Episodes


Antonio Afonso


Technical University of Lisbon - ISEG (School of Economics and Management); UECE (Research Unit on Complexity and Economics); European Central Bank (ECB)

João Tovar Jalles


University of Aberdeen - Business School; European Central Bank, DG Economics - Fiscal Policies Division

September 16, 2011

ISEG Working Paper No. 15/2011/DE/UECE

Abstract:     
In an OCDE panel, for the period 1970-2010, we assess the effects of fiscal consolidation episodes, with four different definitions. Our results reveal that lower final government consumption would increase private consumption in three out of the four approaches, when there is a fiscal consolidation, and the debt ratio is above the cross-country average. The change in the cyclically adjusted primary balance and the duration of the consolidation episode contribute for the success of the consolidation, and the opposite applies if the latter is more based on the revenue side. Finally, the effects of social transfers on private investment tend to be negative.

Number of Pages in PDF File: 41

Keywords: fiscal consolidation, non-Keynesian effects, panel data, logit

JEL Classification: C23, E21, E62, H5, H62

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Date posted: September 17, 2011  

Suggested Citation

Afonso, Antonio and Jalles, João Tovar, Assessing Fiscal Episodes (September 16, 2011). ISEG Working Paper No. 15/2011/DE/UECE. Available at SSRN: http://ssrn.com/abstract=1928972 or http://dx.doi.org/10.2139/ssrn.1928972

Contact Information

Antonio Afonso (Contact Author)
Technical University of Lisbon - ISEG (School of Economics and Management) ( email )
R. Miguel Lupi, 20
Lisbon, 1248-078
Portugal
+351 21 392 2807 (Phone)
+351 21 396 6407 (Fax)
HOME PAGE: http://www.iseg.utl.pt/~aafonso/AAWeb.html
UECE (Research Unit on Complexity and Economics)
Rua Miguel Lupi 20
Lisbon, 1249-078
Portugal
+351-213 925 912 (Phone)
+351-213 971 196 (Fax)
HOME PAGE: http://www.iseg.utl.pt/~uece/
European Central Bank (ECB) ( email )
Kaiserstrasse 29
Frankfurt am Main, D-60311
Germany
HOME PAGE: http://www.ecb.int/home/html/index.en.html
João Tovar Jalles
University of Aberdeen - Business School ( email )
Dunbar Street
Aberdeen AB24 3QY, Scotland AB24 3QY
United Kingdom
HOME PAGE: http://www.abdn.ac.uk/business/staffmember.php?ID=pec227
European Central Bank, DG Economics - Fiscal Policies Division ( email )
Kaiserstrasse 29
Frankfurt am Main, D-60311
Germany
HOME PAGE: http://www.ecb.int
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References:  28

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