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BIS Working Papers No 553 What drives the short-run costs of fiscal consolidation ? Evidence from OECD countries
| Content Provider | Semantic Scholar |
|---|---|
| Author | Banerjee, Ryan Niladri Zampolli, Fabrizio |
| Copyright Year | 2019 |
| Abstract | We investigate how the short-term effects of fiscal consolidation on output and employment vary with the state of the business cycle, monetary policy, public debt, the current account, and private credit. By examining the response of a large number of variables, we are also able to shed light on the transmission channels of fiscal policy. Our main finding is that short-term output multipliers are below unity, even in states in which multipliers are expected to be larger (eg when the output gap is negative or monetary policy tight). Key offsetting factors that reduce the size of multipliers and explain differences across states are the extent to which the external sector improves and monetary policy eases. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | https://www.bis.org/publ/work553.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
