Macroeconomic and welfare costs of U.S. fiscal imbalances /

Macroeconomic and welfare costs of U.S. fiscal imbalances /

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Bibliographic Details
Author / Creator:	Gruss, Bertrand, author.
Imprint:	[Washington, D.C.] : International Monetary Fund, ©2012.
Description:	1 online resource (35 pages) : illustrations
Language:	English
Series:	IMF working paper ; WP/12/38 IMF working paper ; WP/12/38.
Subject:	Fiscal policy -- United States -- Econometric models. Debts, Public -- United States -- Econometric models. Debts, Public -- Econometric models. Economic history. Fiscal policy -- Econometric models. United States -- Economic conditions -- Econometric models. United States.
Format:	E-Resource Book
URL for this record:	http://pi.lib.uchicago.edu/1001/cat/bib/12500044

Hidden Bibliographic Details
Other authors / contributors:	Torres, José L., author. International Monetary Fund. Fiscal Affairs Department, issuing body.
ISBN:	1463951493 9781463951498 1463933819 9781463933814 9781463988890 1463988893 9781463933814
Digital file characteristics:	data file
Notes:	At head of title: Fiscal Affairs Department. Title from PDF title page (IMF Web site, viewed January 31, 2012). "January 2012." Includes bibliographical references.
Summary:	In this paper we use a general equilibrium model with heterogeneous agents to assess the macroeconomic and welfare consequences in the United States of alternative fiscal policies over the medium-term. We find that failing to address the fiscal imbalances associated with current federal fiscal policies for a prolonged period would result in a significant crowding-out of private investment and a severe drag on growth. Compared to adopting a reform that gradually reduces federal debt to its pre-crisis level, postponing debt stabilization for two decades would entail a permanent output loss of about 17 percent and a welfare loss of almost 7 percent of lifetime consumption. Moreover, the long-run welfare gains from the adjustment would more than compensate the initial losses associated with the consolidation period.

Description
Summary:	In this paper we use a general equilibrium model with heterogeneous agents to assess the macroeconomic and welfare consequences in the United States of alternative fiscal policies over the medium-term. We find that failing to address the fiscal imbalances associated with current federal fiscal policies for a prolonged period would result in a significant crowding-out of private investment and a severe drag on growth. Compared to adopting a reform that gradually reduces federal debt to its pre-crisis level, postponing debt stabilization for two decades would entail a permanent output loss of about 17 percent and a welfare loss of almost 7 percent of lifetime consumption. Moreover, the long-run welfare gains from the adjustment would more than compensate the initial losses associated with the consolidation period.
Item Description:	At head of title: Fiscal Affairs Department. Title from PDF title page (IMF Web site, viewed January 31, 2012). "January 2012."
Physical Description:	1 online resource (35 pages) : illustrations
Bibliography:	Includes bibliographical references.
ISBN:	1463951493 9781463951498 1463933819 9781463933814 9781463988890 1463988893