The permanent effects of fiscal consolidations

• 成果类型: Article; Proceedings Paper
• 署名作者: Fatas, Antonio; Summers, Lawrence H.
• 署名单位: INSEAD Business School; Harvard University; National Bureau of Economic Research
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2017.11.007
• 发表日期: 2018
• 页码: 238-250
• 关键词: Fiscal policy; hysteresis; persistence

摘要

The global financial crisis has permanently lowered the path of GDP in all advanced economies. At the same time, and in response to rising government debt levels, many of these countries have been engaging in fiscal consolidations that have had a negative impact on growth rates. We empirically explore the connections between these two facts by extending to longer horizons the methodology of Blanchard and Leigh (2013) regarding fiscal policy multipliers. Our results provide support for the presence of strong hysteresis effects of fiscal policy. The large size of the effects points in the direction of self-defeating fiscal consolidations as suggested by DeLong and Summers (2012). Attempts to reduce debt via fiscal consolidations have very likely resulted in a higher debt to GDP ratio through their long-term negative impact on output. (C) 2018 The Authors. Published by Elsevier B.V.