The output effect of fiscal consolidation plans

• 成果类型: Article; Proceedings Paper
• 署名作者: Alesina, Alberto; Favero, Carlo; Giavazzi, Francesco
• 署名单位: Harvard University; Bocconi University; Bocconi University; Centre for Economic Policy Research - UK; National Bureau of Economic Research; Massachusetts Institute of Technology (MIT)
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2014.11.003
• 发表日期: 2015
• 页码: S19-S42
• 关键词: Fiscal adjustment; confidence; INVESTMENT

摘要

We show that the correct experiment to evaluate the effects of a fiscal adjustment is the simulation of a multiyear fiscal plan rather than of individual fiscal shocks. Simulation of fiscal plans adopted by 16 OECD countries over a 30-year period supports the hypothesis that the effects of consolidations depend on their design. Fiscal adjustments based upon spending cuts are much less costly, in terms of output losses, than tax-based ones and have especially low output costs when they consist of permanent rather than stop-and-go changes in taxes and spending. The difference between tax-based and spending-based adjustments appears not to be explained by accompanying policies, including monetary policy. It is mainly due to the different responses of business confidence and private investment. (C) 2014 Elsevier B.V. All rights reserved.