Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/197961
Authors: 
El-Shagi, Makram
von Schweinitz, Gregor
Year of Publication: 
2019
Series/Report no.: 
IWH Discussion Papers 13/2019
Abstract: 
In this paper, we use local projections to investigate the impact of consolidation shocks on GDP growth, conditional on the fragility of government finances. Based on a database of fiscal plans in OECD countries, we show that spending shocks are less detrimental than tax-based consolidation. In times of fiscal fragility, our results indicate strongly that governments should consolidate through surprise policy changes rather than announcements of consolidation at a later horizon.
Subjects: 
fiscal multipliers
fiscal consolidation
local projections
JEL: 
E62
H63
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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