Fiscal Consolidation after the Great Recession: The Role of Composition

Abstract

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Mad about Austerity? The Effect of Fiscal Consolidation on Public Opinion

“…We also use data on narrative consolidation episodes collected by Guajardo, Leigh, and Pescatori () and Kataryniuk and Valles (), with the latter study focusing on the last part of the sample. One important advantage of these episodes is that they have been selected to represent autonomous or “exogenous” shifts in fiscal policy, although it is not uncontroversial that they really are.…”

“…More generally, this strand of research has gained impetus through the identification of fiscal innovations through a narrative approach (Devries et al. , Guajardo, Leigh, and Pescatori , Kataryniuk and Valles ).…”

Functional components of public expenditure, fiscal consolidations, and economic activity

“…The vector of the fiscal variables comprises two sub‐sets of co‐variates: the first accounts for the fiscal consolidations; and the second for the public expenditures and respective functional components. Fiscal consolidation episodes were identified using the work of Devries, Guajardo, Leigh, and Pescatori () for the period 1990–2009 and updated from Kataryniuk and Vallés () for the years 2010–2012. Both authors use a narrative approach to identify those consolidations.…”

“…Both authors use a narrative approach to identify those consolidations. For the missing data for Greece and Luxembourg, we are consistent with the narrative approach and combine the information provided by Kataryniuk and Vallés (), Dellepiane and Hardiman () and OECD () country notes on Restoring Public Finances to obtain the respective consolidation periods and kind . Hence, our fiscal consolidation variable ( Consolidation ) is a dummy variable that takes the value of one in the years in which a fiscal consolidation is being implemented (zero, otherwise).…”

Aspect of fiscal consolidation: Evidence from Serbia

“…Furthermore, fi scal consolidation provides the opportunity to rationalize and enhance the tax systems as well as to get rid of distortion damaging the economy (Princen & Moure, 2013). Bakker and Christiansen (2014) emphasize that it's notable that fi scal consolidation leads to the genuine improvement in government solvency, while Kataryniuk and Valles (2015) noticed that signifi cant fi scal consolidation may reduce the need for future fi scal operations, raising the current confi dence of households and enterprises. Samuelson and Nordhaus (2001) defi ne fi scal policy as the use of taxation and government spending to infl uence the economy.…”