Fiscal policy papers

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Selected references on fiscal issues

  • Julio Escolano: A Practical Guide to Public Debt Dynamics, Fiscal Sustainability, and Cyclical Adjustment of Budgetary Aggregates

  • The IMF Staff Report on Fiscal Policy and Long-Term Growth: "Fiscal policy is an effective tool for supporting growth. While it is difficult to disentangle the impact of fiscal reforms from other factors and to determine causality with certainty, the analysis suggests that they could lift medium- to long-term growth by 3/4 of a percentage point in advanced economies and even more in developing economies."

  • Elva Bova, Marta Ruiz-Arranz, Frederik Toscani, and H. Elif Ture, The Fiscal Costs of Contingent Liabilities : A New Dataset: "We find that contingent liability realizations are a major source of fiscal distress. The average fiscal cost of a contingent liability realization is 6 percent of GDP but costs can be as high as 40 percent for major financial sector bailouts. Contingent liability realizations are correlated among each other and tend to occur during periods of growth reversals and crises, accentuating pressure on the budget during already difficult times. Countries with stronger institutions are able to better control and address the underlying risks so that they are less exposed to contingent liability realizations."

  • Maria Grazia Attinasi and Luca Metelli: Is fiscal consolidation self-defeating? ECB Working Paper 1883, February 2016, "We define a
    fiscal consolidation episode as self-defeating if the debt-to-GDP ratio does not decrease compared to the pre-shock level. Our main finding is that when consolidation is implemented via a cut in government primary spending, the debt ratio, after an initial increase, falls to below its pre-shock level."

  • Carlo Cottarelli and Laura Jaramillo: Walking Hand in Hand: Fiscal Policy and Growth in Advanced Economies; IMF Working Paper 12/237; May 1, 2012

  • Paolo Mauro and Jan Zilinsky, PIIE Policy Brief 15-15: Fiscal Tightening and
    Economic Growth: "For countries facing a prolonged recession that are able to finance fiscal stimulus without incurring excessive borrowing cost increases, relaxing fiscal policy may be reasonable even if its impact on growth is uncertain."

  • Benedict Clements, Ruud de Mooij, Sanjeev Gupta, and Michael Keen: Fiscal Policy and Inequality Volume, 2015

  • Timothy C. Irwin: Accounting Devices and Fiscal Illusions

  • Olivier Blanchard and Daniel Leigh: Growth Forecast Errors and
    Fiscal Multipliers

  • Carlo Cottarelli speech: Fiscal Federations: Lessons for the Design of a European Fiscal Union

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