Measuring the Effectiveness of Budget Consolidation Efforts

Journal of Economics and Statistics, Vol. 211, Nos. 5-6, 1993

Posted: 20 Oct 2008

Date Written: May 17, 1993

Abstract

Theoretical arguments and empirical evidence are presented to prove the poor quality of the structural budget balance in assessing the effectiveness of budget consolidation efforts. Changes in the structural budget balance currently used as an indicator of fiscal stance give a significantly distorted picture of what consolidation policies achieve. The paper proposes a simple but effective alternative which is free of the shortcomings of the traditional approach. An application to Austrian data illustrates the suggested procedure.

Keywords: Structural budget balance, fiscal stance, consolidation

JEL Classification: H6, H62, H5

Suggested Citation

Larch, Martin, Measuring the Effectiveness of Budget Consolidation Efforts (May 17, 1993). Journal of Economics and Statistics, Vol. 211, Nos. 5-6, 1993, Available at SSRN: https://ssrn.com/abstract=1286054

Martin Larch (Contact Author)

European Fiscal Board ( email )

Belgium
0032 2 2969244 (Phone)

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