NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Uncertain Fiscal Consolidations

Huixin Bi, Eric M. Leeper, Campbell B. Leith

NBER Working Paper No. 17844
Issued in February 2012
NBER Program(s):Economic Fluctuations and Growth

The paper explores the macroeconomic consequences of fiscal consolidations whose timing and composition are uncertain. Drawing on the evidence in Alesina and Ardagna (2010), we emphasize whether or not the fiscal consolidation is driven by tax rises or expenditure cuts. We find that the composition of the fiscal consolidation, its duration, the monetary policy stance, the level of government debt and expectations over the likelihood and composition of fiscal consolidations all matter in determining the extent to which a given consolidation is expansionary and/or successful in stabilizing government debt.

download in pdf format
   (305 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w17844

Published: Huixin Bi & Eric M. Leeper & Campbell Leith, 2013. "Uncertain Fiscal Consolidations," Economic Journal, Royal Economic Society, vol. 0, pages F31-F63, 02. citation courtesy of

Users who downloaded this paper also downloaded* these:
Leeper w18877 Fiscal Limits and Monetary Policy
Alesina and Ardagna w15438 Large Changes in Fiscal Policy: Taxes Versus Spending
Giavazzi and Pagano Can Severe Fiscal Contractions Be Expansionary? Tales of Two Small European Countries
Alesina, Favero, and Giavazzi w18336 The Output Effect of Fiscal Consolidations
Leeper and Walker w16819 Fiscal Limits in Advanced Economies
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us