Fiscal Consolidation Contrasting Strategies &amp; Lessons from International Experiences

Bibow, Joerg

doi:10.2139/ssrn.499263

Cited by 11 publications

(6 citation statements)

References 52 publications

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“…Consolidation took place in an environment of strong GDP growth. Monetary policy helped to keep bond yields close to nominal GDP growth, so that the interest burden remained low (Bibow, 2004).…”

Section: Economic Environmentmentioning

confidence: 99%

Fiscal Consolidation: Part 4. Case Studies of Large Fiscal Consolidation Episodes

Blöchliger

Song

Sutherland

2012

OECD Economics Department Working Papers

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This paper provides an analysis of large and sustained fiscal consolidation episodes in OECD countries implemented between 1980 and 2000. It reviews how fiscal policy variables evolved during these episodes, how consolidation was influenced by the wider economic environment, and how the political economy side helped trigger and sustain consolidation efforts. Results suggest that successful consolidation – as measured by deficit reduction and debt stabilisation or decline – was driven by spending cuts and to a lesser extent by revenue increases. Most episodes started on a basis of improving competitiveness following currency depreciation and, in turn, favourable growth prospects, closing output gaps and – with some lag – falling unemployment. Interest rates started to decline two years after consolidation had started, suggesting that it took some time to earn credibility. With regard to political economy, most consolidation episodes were implemented shortly after an election. More than half of the governments that had started consolidation were re-elected, and some even strengthened consolidation efforts after then. In some cases, an incoming government of a different political colour pursued consolidation. Consolidation budgétaire : Partie 4. Études de cas de redressements budgétaires passés de grande envergure Ce document analyse les phases antérieures de corrections budgétaires fortes et durables dans des pays de l’OCDE intervenues entre 1980 et 2000. Il examine l’évolution des variables de la politique budgétaire au cours de ces phases, l’influence de l’environnement économique global sur le redressement budgétaire et le rôle des considérations d’économie politique dans le déclenchement et le maintien des efforts d’assainissement. Les résultats laissent penser qu’un programme de redressement réussi (réduction du déficit et stabilisation ou réduction de la dette) repose sur une contraction des dépenses et, dans une moindre mesure, une augmentation des recettes. La plupart des corrections ont été amorcées alors que la compétitivité s’améliorait à la suite d’une dépréciation de la monnaie, induisant des perspectives de croissance plus favorables, une réduction des écarts de production et, avec un certain décalage, un recul du chômage. Les taux d’intérêt ont commencé à baisser deux ans après le début de la correction, ce qui montre qu’il faut un certain temps pour acquérir une crédibilité. S’agissant d’économie politique, la plupart des corrections ont été engagées peu après une élection. Plus de la moitié des gouvernements qui avaient amorcé un resserrement ont été réélus et certains l’ont même accentué ensuite. Il est arrivé aussi qu’un nouveau gouvernement poursuive l’action de redressement.

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Section: Economic Environmentmentioning

confidence: 99%

Fiscal Consolidation: Part 4. Case Studies of Large Fiscal Consolidation Episodes

Blöchliger

Song

Sutherland

2012

OECD Economics Department Working Papers

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“…Germany's experimentation with balancing the budget "no matter what" since unification provides another sad case of how to wreck rather than consolidate public finances (see Bibow [2003Bibow [ , 2004Bibow [ , and 2005). …”

Section: Sustainability Of Bretton Woods 3?mentioning

confidence: 99%

Bretton Woods 2 is Dead, Long Live Bretton Woods 3?

Bibow

2010

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. external deficit-soaring household indebtedness-was based not on safe debts but rather toxic ones. We critique the "global saving glut" hypothesis, and propose the "global dollar glut" hypothesis in its stead. With the U.S. private sector in retrenchment mode, the question arises whether fiscal expansion might not only succeed in filling the gap in U.S. domestic demand but also restart global arrangements along BW2 lines, albeit this time based on public debt-call it "Bretton Woods 3." This paper explores the chances of a BW3 regime, highlighting the role of "dollar leveraging" in sustaining U.S. trade deficits. Longer-term prospects for a postdollar standard are discussed in the light of John Maynard Keynes's "bancor" plan. Terms of use: Documents in

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“…Para usar a tipologia das estratégias de consolidação fiscal proposta por Bibow (2004), foi um ajuste fiscal do tipo "growth-based consolida-tion", e não um ajuste de perfil "thrift-based". A consolidação fiscal foi uma consequência da política monetária expansionista; em outras palavras, não foi o aumento da "poupança pública" o determinante do boom de investimentos no período, mas, sim, a consolidação de expectativas favoráveis acerca da evolução esperada da demanda agregada 12 .…”

Section: Os Anos 90 E Os Primeiros Anos Do Século XXIunclassified

“…Ademais, observa ainda que políticas monetárias expansionistas tiveram papel crucial sobre a performance macroeconômica favorável no grupo de países analisados. Ver também, nesta mesma linha de argumentação, o estudo de caso para a economia norte-americana em Bibow (2004 A referida minuta do FOMC explicita a divisão de opiniões e, mais que isso, o fato de que, até então, a maioria dos membros do Comitê não foi convencida da necessidade da mudança:…”

Section: Os Anos 90 E Os Primeiros Anos Do Século XXIunclassified

Metas de inflação: lições da era Greenspan

Deos

Andrade

2009

Rev. Econ. Polit.

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Fiscal Consolidation Contrasting Strategies & Lessons from International Experiences

Cited by 11 publications

References 52 publications

Fiscal Consolidation: Part 4. Case Studies of Large Fiscal Consolidation Episodes

Fiscal Consolidation: Part 4. Case Studies of Large Fiscal Consolidation Episodes

Bretton Woods 2 is Dead, Long Live Bretton Woods 3?

Metas de inflação: lições da era Greenspan

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