Modeling Optimal Fiscal Consolidation Paths in a Selection of European Countries

24 Pages Posted: 19 Jul 2011

See all articles by Daniel Kanda

Daniel Kanda

International Monetary Fund (IMF)

Date Written: July 2011

Abstract

For a number of countries - Italy, Netherlands, the United Kingdom, Germany, Ireland, and France - this paper develops an inter-temporal model that elicits the implied country-preferences over balancing the conflicting objectives of fiscal consolidation and reduction of economic slack. The model suggests that some front-loading of adjustment is desirable, although the extent would vary by country preferences. It also finds that proposed consolidations may prove to be stronger than acceptable, especially if somewhat larger than anticipated fiscal multipliers lead to a sizeable economic deceleration.

Suggested Citation

Kanda, Daniel, Modeling Optimal Fiscal Consolidation Paths in a Selection of European Countries (July 2011). IMF Working Paper No. 11/164, Available at SSRN: https://ssrn.com/abstract=1888907

Daniel Kanda (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
40
Abstract Views
279
PlumX Metrics