NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Fiscal Expansions and Fiscal Adjustments in OECD Countries

Alberto Alesina, Roberto Perotti

NBER Working Paper No. 5214
Issued in August 1995
NBER Program(s):   ME

This paper considers budget expansions and adjustments in OECD countries in the last three decades. Our main results are: i) on average fiscal expansions are the results of increases in expenditures, particularly of transfer programs, while contractions are typically due to tax increases; ii) however successful (i.e. long lasting), a minority of the total rely primarily on reduction of government wages and employment and cuts in transfer programs; iii) even major successful fiscal adjustments do not seem to have recessionary consequences, on average; iv) different types of governments show different degrees of success at implementing successful fiscal adjustment, with coalition governments showing the worst performance.

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Document Object Identifier (DOI): 10.3386/w5214

Published: Published as "Fiscal Adjustments in OECD Countries: Composition and Macroeconomic Effects", IMF, Vol. 44, no. 2 (June 1997): 210-248.

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