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On the output cost of fiscal consolidations: an empirical investigation on tax and spending multipliers for a sample of OECD economies

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Resumo:We estimate the output costs of fiscal contractions and distinguish between tax-based and expenditure-based adjustments, employing narratively identified fiscal measures. While the studies that use narrative fiscal plans in VARs find short-lasting effects of expenditure-based consolidations, this result is not maintained in a recently developed method of including fiscal shocks in Local Projections. We argue that the Impulse Responses from this approach are inconsistent and augment the Local Projections equations with a term capturing the expectation of future fiscal measures, recovering the results of the previous literature and finding that expenditure-based consolidations tend to be less recessive than tax-based consolidations.
Autores principais:Corrêa, Bruno Biadi
Assunto:Macroeconomics Fiscal consolidations Local projections Rational expectations
Ano:2024
País:Portugal
Tipo de documento:dissertação de mestrado
Tipo de acesso:acesso aberto
Instituição associada:Universidade Nova de Lisboa
Idioma:inglês
Origem:Repositório Institucional da UNL

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