Abstract

http://ssrn.com/abstract=2151380
 


 



The Design of Fiscal Adjustments


Alberto F. Alesina


Harvard University - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Silvia Ardagna


National Bureau of Economic Research (NBER); Goldman Sachs - London

September 24, 2012


Abstract:     
This paper offers three results. First, in line with the previous literature we confirm that fiscal adjustments based mostly on the spending side are less likely to be reversed. Second, spending based fiscal adjustments have caused smaller recessions than tax-based fiscal adjustments. Finally, certain combinations of policies have made it possible for spending based fiscal adjustments to be associated with growth in the economy even on impact rather than with a recession. Thus, expansionary fiscal adjustments are possible.

Number of Pages in PDF File: 52

Keywords: deficit reduction, policy reforms, taxes versus spending

JEL Classification: E62, H62

working papers series





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Date posted: September 24, 2012  

Suggested Citation

Alesina, Alberto F. and Ardagna, Silvia, The Design of Fiscal Adjustments (September 24, 2012). Available at SSRN: http://ssrn.com/abstract=2151380 or http://dx.doi.org/10.2139/ssrn.2151380

Contact Information

Alberto F. Alesina (Contact Author)
Harvard University - Department of Economics ( email )
Littauer Center
Cambridge, MA 02138
United States
617-495-8388 (Phone)
617-495-7730 (Fax)
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Silvia Ardagna
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Goldman Sachs - London ( email )
130 Peterborough Court
133 Fleet Street
London, EC4A 2BB
United Kingdom
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