Successful austerity in the United States, Europe and Japan /

Successful austerity in the United States, Europe and Japan /

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Bibliographic Details
Author / Creator:Batini, Nicoletta, author.
Imprint:[Washington, D.C.] : International Monetary Fund, ©2012.
Description:1 online resource (60 pages) : color charts
Language:English
Series:IMF working paper ; WP/12/190
IMF working paper ; WP/12/190.
Subject:
Multiplier (Economics) -- Econometric models.
Fiscal policy -- United States -- Econometric models.
Fiscal policy -- Europe -- Econometric models.
Fiscal policy -- Japan -- Econometric models.
Fiscal policy -- Econometric models.
Europe.
Japan.
United States.
Electronic books.
Format: E-Resource Book
URL for this record:http://pi.lib.uchicago.edu/1001/cat/bib/11139242
Hidden Bibliographic Details
Other authors / contributors:Callegari, Giovanni, author.
Melina, Giovanni, author.
International Monetary Fund. European Department.
ISBN:1475537921
9781475537925
Notes:Title from PDF title page (IMF Web site, viewed Jul. 26, 2012).
"EUR."
"July 2012."
Includes bibliographical references (pages 33-37).
Summary:The output effects of 2009 fiscal expansions have been hotly debated. But the discussion of fiscal multipliers is even more relevant now that several European countries have had to quickly retract their stimulus measures in an effort to regain market confidence. Using regime-switching VARs we estimate the impact of fiscal adjustment on the United States, Europe and Japan allowing for fiscal multipliers to vary across recessions and booms. We also estimate ex ante probabilities of recessions derived in association with different-sized and different types of consolidation shocks (expenditure- versus tax-based). We use these estimates to understand how consolidations should be designed to be most effective in terms of permanently and rapidly reducing a country's debt-to-GDP ratio. The main finding is that smooth and gradual consolidations are to be preferred to front loaded or aggressive consolidations, especially for economies in recession facing high risk premia on public debt, because sheltering growth is key to the success of fiscal consolidation in these cases.
Standard no.:10.5089/9781475537925.001
Table of Contents:
  • Cover; Abstract; Contents; I. Introduction; II. Literature Review; A. Empirical Literature on The Effects of Fiscal Shocks; B. The Effects of Fiscal Policy: What do Models Say?; C. Fiscal Policy Under Special Conditions; III. Econometric Methodology; A. The Model; B. Testing for the TVAR Structure; C. Non-Linear Impulse Response Functions; D. Regime-Dependent Fiscal Multipliers; E. Conditional Probabilities of a Recession; IV. Results; A. Non-Linear IRFS; B. Fiscal Multipliers; C. Conditional Probabilities of a Recession Following a Fiscal Shock; V. What Does This Mean in Practice?
  • A. Model Used for The Debt SimulationsB. Debt simulations; VI. Concluding Remarks; VII. References; Figures; 1. Average Responses to Shocks to Government Spending-Euro Area; 2. Average Responses to Shocks to Government Spending-France; 3. Average Responses to Shocks to Government Spending-Italy; 4. Average Responses to Shocks to Government Spending-Japan; 5. Average Responses to Shocks to Government Spending-United States; 6. Average Responses to Shocks to Net Taxes-Euro Area; 7. Average Responses to Shocks to Net Taxes-France; 8. Average Responses to Shocks to Net Taxes-Italy.
  • 9. Average Responses to Shocks to Net Taxes-Japan10. Average Responses to Shocks to Net Taxes-United States; 11. Average Cumulative Government Spending and Tax Multipliers; 12. Baseline Scenario (Adverse Growth Shock, No Fiscal Consolidation); 13. Debt-to-GDP Ratio Following a Smooth Fiscal Consolidation (Scenario I); 14. Debt-to-GDP Ratio Following a Frontloaded Fiscal Consolidation (Scenario II); 15. Debt-to-GDP Ratio-Difference Between Frontloaded and Smooth Fiscal; 16. Debt-To-Gdp Ratio-Difference Between Frontloaded (Spending-Cuts-Only Based).
  • 17. Debt-to-GDP Ratio-Difference Between Frontloaded and Smooth Fiscal18. Debt-to-Gdp Ratio-Difference Between Frontloaded and Smooth Fiscal; Tables; 1. Tests for threshold VAR; 2. Cumulative Fiscal Multipliers; 3. Conditional Probabilities of a Recession (Expenditure Cut); 4. Conditional Probabilities of a Recession (Tax Hike); VIII. Data Appendix; A. Euro Area (1985 Q1
  • 2009 Q4):; B. France (1970 Q1
  • 2010 Q4):; C. Italy (1981 Q1
  • 2007 Q4):; D. Japan (1981Q1
  • 2009 Q4):; E. United States (1975 Q1
  • 2010 Q2).

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