Uncertain fiscal consolidations

Bi, H., Leeper, E.M. and Leith, C.B. (2012) Uncertain fiscal consolidations. Working Paper. National Bureau of Economic Research. (doi: 10.3386/w17844).

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Publisher's URL: http://www.nber.org/papers/w17844


The paper explores the macroeconomic consequences of fiscal consolidations whose timing and composition are uncertain. Drawing on the evidence in Alesina and Ardagna (2010), we emphasize whether or not the fiscal consolidation is driven by tax rises or expenditure cuts. We find that the composition of the fiscal consolidation, its duration, the monetary policy stance, the level of government debt and expectations over the likelihood and composition of fiscal consolidations all matter in determining the extent to which a given consolidation is expansionary and/or successful in stabilizing government debt.

Item Type:Research Reports or Papers (Working Paper)
Additional Information:National Bureau of Economic Research Working Paper Series no. 17844.
Glasgow Author(s) Enlighten ID:Leith, Professor Campbell
Authors: Bi, H., Leeper, E.M., and Leith, C.B.
Subjects:H Social Sciences > HB Economic Theory
H Social Sciences > HJ Public Finance
College/School:College of Social Sciences > Adam Smith Business School > Economics
Publisher:National Bureau of Economic Research

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Project CodeAward NoProject NamePrincipal InvestigatorFunder's NameFunder RefLead Dept
480171New Directions in Monetary and Fiscal Policy Analysis at the Macroeconomic LevelCampbell LeithEconomic & Social Research Council (ESRC)ES/G006873/1Economics