Hidden Bibliographic Details
| Other authors / contributors: | Wescott, Robert F.
Driscoll, David D.
International Monetary Fund.
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| ISBN: | 1557756244
9781557756244
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| Notes: | "Draws on material originally contained in IMF Working Paper 96/59, 'An empirical analysis of fiscal adjustments', by C. John McDermott and Robert F. Wescott of the Fund's Research Dept ... This material is refined for the general readership by editing and partial redrafting ... It has been prepared by David C. Driscoll of the Fund's External Relations Dept."
November 1996"--Title page verso
"January 6, 1997"--Electronic information screen
Title from HTML file as viewed on 23 Nov 2005.
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| Summary: | Budget deficits have soared in the industrial countries over the past 20 years, and most countries are faced with the challenge of bringing them back to earth. This is not easy. Electorates seem unwilling to pay more taxes, and according to traditional Keynesian theory, reducing government expenditures can lead to recession. This paper presents a solution to the dilemma through the use of a neoclassical model: reducing expenditures does not necessarily lead to reduced economic activity. It could signal lower future tax burdens and encourage investment, leading to a resurgence in economic output.
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