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Modeling Optimal Fiscal Consolidation Paths in a Selection of European Countries

For a number of countries - Italy, Netherlands, the United Kingdom, Germany, Ireland, and France - this paper develops an inter-temporal model that elicits the implied country-preferences over balancing the conflicting objectives of fiscal consolidation and reduction of economic slack. The model sug...

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Bibliographic Details
Main Author: Kanda, Daniel
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2011
Series:IMF Working Papers
Subjects:
Fiscal Stance
Output Gap
Fiscal Multipliers
Fiscal Policy
Production
Fiscal Consolidation
Macroeconomics: Production
Fiscal Sustainability
Forecasts Of Budgets, Deficits, And Debt
Macroeconomics
Economic Theory
Production And Operations Management
Italy
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:For a number of countries - Italy, Netherlands, the United Kingdom, Germany, Ireland, and France - this paper develops an inter-temporal model that elicits the implied country-preferences over balancing the conflicting objectives of fiscal consolidation and reduction of economic slack. The model suggests that some front-loading of adjustment is desirable, although the extent would vary by country preferences. It also finds that proposed consolidations may prove to be stronger than acceptable, especially if somewhat larger than anticipated fiscal multipliers lead to a sizeable economic deceleration
Physical Description:23 pages
ISBN:9781462302208

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